Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Road Pricing

Mr. Stern: To ask the Secretary of State for Transport if he will make a statement on the future of road pricing.

The Secretary of State for Transport (Mr. Paul Channon): Road pricing is often suggested as a way of using road space more efficiently in urban areas. It has some attractions, and I do not wish to rule it out for the future, but there are some serious practical problems, and it clearly could not be an immediate option.

Mr. Stern: I am grateful to my right hon. Friend for that reply. Does he agree that no remotely economic way of road pricing has yet been demonstrated anywhere in the world and that the chances of this wild idea becoming a reality remain very small?

Mr. Channon: I agree that there is nowhere on a comparable, or even approaching comparable scale to London—in respect of which road pricing is often mentioned—where anything is in place. The problems of congestion, for example, are much in the minds of all hon. Members. The issue needs careful study but, as I have said, road pricing could not be an immediate option. There are serious practical problems associated with it.

Mr. Roy Hughes: As the Treasury will collect approximately £17 billion in motor taxation during the current year and as less than one quarter of it will be spent on roads and maintenance, is it not diabolical that the Government should even consider imposing additional taxation on the motorist?

Mr. Channon: I do not think that I accept the hon. Member's figures in their entirety, but his general point is well taken. Motorists pay a great deal in taxation. It is a bit early for the hon. Gentleman to say that we are being diabolical because, as I said a few moments ago, road pricing could not be an immediate option. There are serious practical problems with it, and nothing could be done without a great deal of study. It is a bit too early to accuse us of all these appalling crimes.

Mr. Dickens: rose—

Hon. Members: Hear, hear.

Mr. Dickens: It is nice to be back. Does my right hon. Friend agree that we have, somehow, to lower the density of traffic in our city centres? Taxation as a way forward would enable buses and taxis to move faster through our city centres and give people more of a chance to get about.
Does my right hon. Friend agree that we must encourage more private investment so that we can accelerate our major road building programme in return for, perhaps, a toll which would enable motorists and other road users to save many pounds in petrol?

Mr. Channon: My hon. Friend raises several important matters. There are other questions on the Order Paper on which the subject of road expenditure may crop up. My hon. Friend will be aware that the Government propose to publish a roads White Paper in the not too distant future. I shall bear what my hon. Friend has said in mind.
I share my hon. Friend's concern to reduce inner-city congestion. Whether road pricing is the right way to go about it remains doubtful. The matter needs careful study. I urge hon. Members on both sides of the House—this. is clearly not a party political issue—to bear in mind the experiences of other towns and the arguments that have been advanced in favour of the proposal.

Local Authority Operations (Buy-outs)

Mr. Brandon-Bravo: To ask the Secretry of State for Transport if, when considering proposals for privatising local authority transport operations, he will give full consideration to the desires of employees to participate in buy-outs.

The Minister for Public Transport (Mr. Michael Portillo): Yes. When a company is sold by competitive tender, we encourage the vendor to give the employees a reasonable opportunity to acquire a controlling interest, and we have been prepared to consider some sales by single tender to employees.

Mr. Brandon-Bravo: My hon. Friend knows that Nottingham City Transport was the largest municipal undertaking which was affected by the Transport Act 1985. Is he aware that that undertaking has confounded the prophets of doom as it is now a successful company which pays a dividend to its owners in the city rather than one which milks the ratepayer? The staff and employees of that undertaking want to share in the success. Above all, they want to secure their future. They are concerned about the future and they want to buy a stake in the business that employs them. What help and advice can my hon. Friend offer?

Mr. Portillo: I am very pleased with the success of the company and that the prophets of doom have been confounded. I see no reason why local authorities should want to own bus companies. I suggest that the staff should try to persuade the local authority to prepare a proposal for privatisation which includes employee participation.

Mr. Snape: Has the Minister seen the report on the future of West Midlands Travel, prepared by Peat Marwick McLintock? Does he agree with its conclusion that the breakup of West Midlands Travel would be generally disadvantageous to the travelling public?

Mr. Portillo: I have not seen the report, although I am aware of the seminar on the subject that was organised last


week. We have sent a proposal to the passenger transport authorities requesting their response to a suggestion that the companies might be split. I look forward to reading their responses and shall consider them carefully.

Mr. Favell: Is my hon. Friend aware that the Greater Manchester passenger transport authority, having decentralised the operation of Greater Manchester Buses at the time of decentralisation, is now recentralising it, not for the sake of efficiency, but to make it more difficult for employees to indulge in buy-outs? Is he aware that there have been great successes? For example, the southern division has taken on enormous competition from the private sector, yet it is carrying more passengers than ever before? Is he aware that the engineering division will have to sack people because it has been forbidden to carry out private sector work?

Mr. Portillo: I am distressed at what my hon. Friend tells me. Greater Manchester is in very much the same position as West Midlands Travel in that a proposal letter has been sent by my Department and we are now receiving responses from the PTA and Greater Manchester Buses about the suggestion that there might be a splitting of the company. We shall consider their responses very carefully.

BR (Heathrow and Gatwick)

Mr. Speller: To ask the Secretary of State for Transport if he will meet the chairman of British Rail to discuss the condition of stations and rolling stock where British Rail serves passengers arriving at Heathrow and Gatwick.

Mr. Portillo: The upkeep of particular stations and rolling stock is a management matter for British Rail. I am sure that it is aware of the commercial advantages of providing high-quality services from airports.

Mr. Speller: Is my hon. Friend aware that British Rail does not seem concerned about other circumstances? For example, Gatwick is the darkest, greyest of stations to welcome people, yet it provides an excellent service. At Heathrow, London Underground is intolerable in every way, and the route to the south-west is via Reading station, which is always dirty, where there are no seats, the buffets are awful and there are no porters, as on most of our stations. Does my hon. Friend agree that if British Rail is to survive as an economic entity it must do something about putting passengers as well as patients first?

Mr. Portillo: I am very disturbed by what my hon. Friend says, particularly about Reading, because I understand that £20 million has been spent on the modernisation of Reading station. However, I know that the management takes these matters seriously and I shall certainly draw my hon. Friend's remarks to their attention.

Mr. Gregory: When my hon. Friend next meets the chairman of British Rail, bearing in mind that tourism is Britain's fastest growing industry, will he discuss with him the possibility of an incentive scheme for his staff, as tourists to this great country expect at major stations such as Gatwick the services of a porter and the ability to understand which train leaves any particular platform? Those facilities are almost non-existent, as are the trollies at Gatwick and at Victoria. That is a national scandal.

Mr. Portillo: My hon. Friend makes a series of interesting points, not least that the way in which British Rail is judged depends on the performance of every individual member of staff as that is its point of contact with passengers. I know that British Rail is most concerned to improve the standard and quality of the service that it provides to its customers. The shortage of trollies is partly a matter of passenger behaviour, and unfortunately many trollies go astray.

London Transport (Overcrowding)

Mr. Harry Greenway: To ask the Secretary of State for Transport what steps he is taking to avoid overcrowding on London buses, trains and London Underground; and if he will make a statement.

Mr. Channon: The only long-term cure for overcrowding is to increase capital investment in public transport. My hon. Friend will be pleased to hear that investment on London railways is now at record levels, and that London Regional Transport alone will be investing well over £1 million a day in London's transport systems.

Mr. Greenway: I welcome my right hon. Friend's assurance that investment is at record levels. However, is he aware that on London's bus, train and Underground services at most hours of the day and night people cannot move because they are so overcrowded? Is he further aware that it is predicted that within a short time surface traffic will come to a standstill if nothing is done and we will be unable to move either above or below ground? Will he initiate new underground lines and more trains and will he get rid of one-man operated buses and bus lanes and do everything that he can to get London's traffic moving?

Mr. Channon: I cannot agree with everything that my hon. Friend said. However, I agree with him entirely about the need to improve London's rail services, whether Underground or Network SouthEast. He will be pleased to learn that Underground investment is now about twice as high in real terms as it was in 1984–85, the last year of the Greater London council. I am sure that he will also be pleased to learn of the enormous investment in Network SouthEast since 1983—some 16 major schemes together worth over £500 million—and there is much more investment to come. The central London rail study and the east London rail study, about which my hon. Friend will know, show that much more improvement is necessary in London, which the Government are prepared to make.

Mr. Spearing: Is the Secretary of State aware that London Transport has confirmed to me that there are fewer trains running in peak hours on some Underground lines than there were 50 years ago and in the early 1950s? Is he aware that there are fewer trains arriving at Westminster on the District and Circle lines than there were 50 years ago, to the disadvantage of people living in places such as West Ham and Plaistow? Does he agree that, as a matter of urgency, some of the investment of which he speaks should be spent on restoring the signalling arrangements that used to be available for those trains so that more trains can be run on existing lines?

Mr. Channon: The hon. Gentleman will be aware that recent investment approvals include the provision of extra trains and the Central line modernisation, which is running at over £700 million. It is an enormous scheme.


They also include the reconstruction of Angel station, enlarged ticket halls and escalators at Liverpool street, new ticket halls at Tower Hill and a massive expansion of investment in London Underground all over London.

Mr. Bowis: Does my right hon. Friend agree that there is an urgent need for more and longer trains and for new lines on the overground such as the opening to commuter services on the west London line, and on the Underground such as the long overdue link to Clapham junction?

Mr. Channon: Yes, I agree with my hon. Friend that there is a need for investment. He pointed out the need for investment on the Underground and I know of his constituency problems about that. I have described that investment to the House. There is also a need for investment in Network SouthEast. My hon. Friend will be pleased to learn—I am sure that he knows already—that over £2 billion of investment on electrification, signalling and rolling stock has taken place on British Rail in the past few years. I have recently approved another £60 million, or thereabouts, for Network SouthEast, new rolling stock for the Chiltern line, and the Cambridge-King's Lynn electrification. We also have large British Rail renewal programmes which are likely to increase.

Mr. Tony Banks: Is the Secretary of State aware that the biggest complaint on transport matters that hon. Members on both sides of the House hear arises from the installation of the ludicrous ticket barriers throughout the Underground system, which is giving rise to a great deal of congestion on the stations? Is the Secretary of State interested in the fact that I intend to introduce a Social Crimes (People's Tribunal) Bill soon and that when I have arraigned before the people's tribunal the idiots who got rid of trams and trolley buses, I shall then try to arraign those who introduced the ludicrous and unacceptable ticket barriers? If the Secretary of State does not want to appear before the people's tribunal, will he ensure that London Transport gets rid of those barriers because no one wants them?

Mr. Channon: It is particularly appropriate, 200 years after the French revolution, that the hon. Gentleman should start to be the Robespierre of London by introducing people's tribunals. It is typical of him.
On his serious point about the safety of the Underground ticket system, he will know that we are expecting a consultants' report and the House will be interested to have that.

Mr. Stanbrook: Whatever steps my right hon. Friend takes, will he please not deregulate London taxis or license mini cabs to ply for hire because if he does so, he will destroy one of London's biggest assets?

Mr. Channon: I take note of what my hon. Friend says. We have no plans to license mini cabs in the way that my hon. Friend describes. I note the strong views of hon. Members about taxis, which we shall consider carefully.

Ms. Ruddock: The Secretary of State has spoken mainly of trains, but as improving the railway network will take much time and as a substantial bus programme could be implemented quickly, will he instruct London Buses to put on the road the 30 Routemasters that are roadworthy but sitting unused in garages? Will he support proposals to strengthen bus lane rules to prevent lanes being clogged by cars? Will he instruct the traffic control support unit to step

up its programme of bus priority at traffic signals, which is enormously beneficial and could be implemented within six months?

Mr. Channon: I am not sure that I agree with all the hon. Lady's remarks. There is considerable controversy about bus lanes; many hon. Members believe that in parts of London they have been put in the wrong places. I shall consider what the hon. Lady said about that. She will be pleased to learn that bus miles have increased significantly and that a further increase of 5 per cent. is planned for this year. Reliability is improved and we shall have more high-frequency mini bus services. Tendering has much improved bus services in London, and I shall welcome her support for all those measures.

Mr. Molyneaux: Can the Secretary of State do anything to persuade London Transport to open the Piccadilly line at Gloucester Road? Many travelling interests, especially those using Heathrow airport, wrote to London Transport about the problem as far back as a month ago. Fairclough, the main contractor, is showing no sign of urgency. Is it not deplorable that visitors from overseas arriving at Heathrow are treated to such a demonstration of incompetence?

Mr. Channon: I shall certainly look into what the right hon. Gentleman says. The right hon. Gentleman's remarks show that there are bound to be short-term problems while a large investment programme is going on. I shall consider specifically the point that he brings to my attention and write to him about it.

Dartford Crossing

Mr. Jacques Arnold: To ask the Secretary of State for Transport when the Dartford crossing will be opened to the public.

The Minister for Roads and Traffic (Mr. Peter Bottomley): Good progress is being made on the new bridge between Dartford and Thurrock, which is due to open early in 1991.

Mr. Arnold: My hon. Friend would probably like to know that the people of north-west Kent are looking forward with considerable enthusiasm to their deliverance from the current heavy traffic james of one or more miles every day north and south waiting pass through the Dartford tunnel. Will he give details of the steps that are being taken to ensure that approch roads to the Dartford bridge will be adequate?

Mr. Bottomley: Approach roads to the bridge at Dartford and Thurrock will be increased to four lanes, the A13 southwards and A2 northwards.

Mr. Dunn: Is my hon. Friend aware that his announcement is most welcome? None the less, there are serious problems combining a need to improve the infrastructure and roads leading to the tunnel and the opening date, bearing in mind that every day the people of Dartford experience serious congestion problems? The fact that we can move forward to the opening will resolve that problem in part. I welcome what my hon. Friend has said.

Mr. Bottomley: It is important to get the necessary infrastructure in place so that the economy can continue to


develop and so that places that need special relief from congestion and extra jobs can benefit from investment, such as in this case, from the private sector.

Severn Crossing

Mr. Roy Hughes: To ask the Secretary of State for Transport if a date for the commencement of the construction of the second Seven crossing has yet been decided.

Mr. Bottomley: The timing depends on the proposals that we shall receive later this year from tenderers, and on approval of the necessary legislation by Parliament.

Mr. Hughes: Is the Minister aware that the Secretary of State for Wales has said that the second crossing will be in place by 1995, whereas his colleague the Minister of State, Welsh Office recently told the Select Committee on Welsh Affairs that there is no guarantee that the second crossing will be in place by the year 2000. Given that our governor-general, the right hon. Member for Worcester (Mr. Walker), does not have the ear of the Prime Minister, who is telling the truth?

Mr. Bottomley: If I were concerned, I would say that it would be difficult to have an extra crossing before 1995, even on the best of assumptions. The hon. Gentleman and many others on both sides of the Severn will be interested to know that we hope to invite tenders in the next week or two. The date of construction of the bridge will depend on the result of those tenders. We are moving forward and that should unite hon. Members on both sides of the House. I am sure that the hon. Gentleman is glad that he asked that question.

Mr. Simon Coombs: Does my hon. Friend agree that a second Severn crossing will substantially increase traffic on the M4 as more and more constituents of the hon. Member for Newport, East (Mr. Hughes) travel towards London? Will my hon. Friend therefore look, in conjunction with those proposals, at improvements to the road network nearer London between Maidenhead and the end of the M4 to ensure that the hon. Member for Newport, East is not back here in a few years demanding further improvements so that his constituents and mine can get to central London on the M4?

Mr. Bottomley: Yes. Perhaps the hon. Member for Newport, East (Mr. Hughes) will have to talk to the hon. Member for Kingston upon Hull, East (Mr. Prescott), who seems on occasion to have different views. It is worth remembering that the English Stones site was chosen for the second bridge because about 60 per cent. of the traffic coming across the Severn from Wales head south rather than towards London.

Mr. Wigley: Given the comments by the hon. Member for Newport, East (Mr. Hughes), will the Minister assure the House that his Department and the Welsh Office co-ordinate closely on this matter? Will the hon. Gentleman assure the House that as the scheme goes ahead there will be co-ordination in terms of the spin-off requirements and planning of employment opportunities so that there are opportunities on both sides of the channel for work on the scheme?

Mr. Bottomley: Those job opportunities are coming and that is generating the extra traffic. Better infrastructure means more economic growth and more economic growth means more traffic—they go together in a cycle.
The hon. Gentleman referred to the hon. Member for Newport, East. I suspect that my right hon. Friends the Secretaries of State for Transport and for Wales get on better than the hon. Gentleman gets on with either of them.

Mr. Prescott: Does the Minister's Department fully agree with the Secretary of State for Wales, who says that there is inadequate expenditure on our transport infrastructure and that 35 of the 51 programmes decided for 1985 have been delayed? Will the White Paper review the situation, especially the iniquitous toll system that the Department intends imposing on traffic over the Severn estuary?

Mr. Bottomley: Is that not very interesting? Suppose we ran a sweeptstake on which party introduced tolls on the Severn bridge? The Labour party was responsible. The hon. Gentleman turns away in Opposition from what he supported in Government.

M40

Mr. Andrew Smith: To ask the Secretary of State for Transport if he will make a statement on the progress of work on the completion of the M40.

Mr. Tim Smith: To ask the Secretary of State for Transport when he expects the M40 extension to be completed.

Mr. Peter Bottomley: Construction of the motorway north of Wendlebury, remains on target for completion by the end of 1990.
We are inviting tenders for the section south of Wendlebury today.
Subject to the outcome and to the satisfactory completion of the remaining statutory procedures we hope to start construction this summer for completion as early as possible.

Mr. Andrew Smith: Does the Minister appreciate that everyone in the Oxford area remains deeply concerned at the prospect of chaos on local roads due to the mishandling of this matter by his Department? Will he confirm that, even on that timetable, there will be a period of eight to 12 months when an additional 9,000 vehicles a day will be piled on to the existing congested local roads? What additional financial support will the Government provide the local highway authority so that it can provide at least some protection to local pedestrians, cyclists, public transport and motorists from that chaos? Local resident in Headington, Risinghurst and north Oxford deserve better treatment than the Minister is giving them.

Mr. Bottomley: I do not know whether the hon. Gentleman has been listening during the past two or three weeks. My right hon. Friend the Secretary of State said that he wanted all the stops pulled out, and issued similar clear instructions, to ensure that the gap was as short as possible, not as long as possible. [Interruption.] If the period which I have announced today is still too long, the hon. Gentleman really has trouble.
We are all aware that the Pear tree roundabout has some of the longest weekend traffic jams in southern England. We know that we must try to accelerate the procedures. We need to pay attention to people's democratic right to object and accept their right to speak before an independent impartial inspector—that may be news to the hon. Gentleman. We want to ensure that local people decide whether they want roads. In the areas in which they want to put up with the casualties, environmental confusion and lack of jobs, they can go on objecting. In Oxfordshire, people are glad that my right hon. Friend has decided that this road should be completed and we now have the chance of closing the gap, rather than expanding it.

Mr. Tim Smith: Is my hon. Friend aware that since the completion of the M25, traffic on the M40 has increased considerably and, with it, the noise that local residents have to put up with? Does he agree that when the motorway is completed all the way to Birmingham, there will be a further substantial increase in traffic, especially in heavy goods vehicles? Will my hon. Friend come along to Gerrards Cross and discuss with the residents the problems of noise, or could we come to the Department to discuss what we are going to do about it?

Mr. Bottomley: Yes, Sir.

Mr. Redmond: Will the Minister ensure that all future specifications for new roads more than meet the volume and traffic flows—

Mr. Speaker: Order. That is a bit wide of the M40.

Mr. Redmond: Will the Minister ensure that the next extension more than meets the specifications made for the previous section and will he ensure that the delays and traffic hold-ups are cut to the minimum?

Mr. Bottomley: We will do the best we can. My right hon. Friend has said that he wants to end the inter-urban congestion. As the hon. Gentleman knows, we are building the M40 as dual three-lane, which will help the traffic north of the west midlands as well as the west midlands itself. There is a problem for the Opposition. If the hon. Member for Kingston upon Hull, East (Mr. Prescott) is properly reported, he seems to be against the building of roads this week.

Sir John Stokes: Is my hon. Friend aware that I have lived by the M40 since it first started? As the route progressed, I moved further out, but the motorway always caught me up. Now the wrong route has been chosen and the butterflies have been preferred to local residents. Can we please clear up the mess as soon as possible?

Mr. Bottomley: Yes, Sir. However, as my hon. Friend will have noticed, our leader has instructed us to be environmentalists and is leading us in the right way.

Traffic Congestion

Mr. Cran: To ask the Secretary of State for Transport what studies have been undertaken by his Department as to the likely annual cost to industry of traffic congestion on Britain's roads.

Mr. Channon: The costs of road congestion are clearly substantial, although there are no reliable estimates of the total costs.

Mr. Cran: I am sure that my right hon. Friend is aware that the industrial community has estimated that traffic congestion in this country is costing British industry about £6,000 million per annum, which illustrates how difficult it is for companies in the north of England and which are trying to export. Against that background, does my right hon. Friend agree that one solution is an accelerated construction programme, but that another is a review of planning methods, which seem to allow a minority to hold up infrastructure expenditure for far too long?

Mr. Channon: On the first point, it is right to review the roads programme which, as my hon. Friend knows, is done every two years. We will come forward with proposals in the next few months. I hope that they will be to his satisfaction and to the satisfaction of most other hon. Members. On planning permission, there is a difficult balance between allowing people to have their democratic rights and not having unreasonable delays. Rather than concentrate so much on planning delays, I have been concentrating on the internal procedures, which take a considerable time—and have done for many years—before a road reaches the planning inquiry stage. I have identified ways of cutting that time by a considerable margin and I look forward to roads being built far more quickly than in the past.

Mrs. Margaret Ewing: Is it not gross complacency for the Secretary of State to base his projections on what he himself says are unreliable statistics, especially against the background of looking forward to the 1992 European market? Is it not extremely important for our industrialists in all areas of the United Kingdom to ensure that they have adequate communications and to ensure that export-led industries are not disadvantaged? His own proposals pale into insignificance when we consider the projects being undertaken at present by the French Government.

Mr. Channon: It is a bit early for the hon. Lady to accuse me of complacency. I have already announced that we shall have a roads review and a programme announcement in the next few months and when the hon. Lady has studied that, she will be in a position to decide whether she thinks it is adequate. I strongly agree with her that it is in the interests of all parts of the United Kingdom that we should have a decent roads programme so that people can get their goods from the United Kingdom to the continent—[HON. MEMBERS: "And railways."] We must also improve the railways, but the hon. railways, but the hon. Lady's question concerned roads, and I agree with the thrust of her comments.

Mr. Adley: Can my right hon. Friend confirm that it is not his opinion that the only way of dealing with congestion on the roads is to build yet more roads?

Mr. Channon: It is not my only way of dealing with congestion on the roads. I am extremely anxious—as, I know, is my hon. Friend—that the advent of the Channel tunnel should lead to a substantial increase in the amount of freight carried by British Rail. I look forward to British Rail's report and its proposals for achieving that north of London. We shall receive that report some time this year. I am certain that, if British Rail handles the matter correctly—as it must and will—substantial opportunities


will be created for businesses in the north and elsewhere to send their goods economically and, above all, reliably, to the continent. That will benefit both BR and the road user.

Mr. Prescott: Does the Secretary of State agree with the Secretary of State for Wales that there is insufficient expenditure on our roads infrastructure, and does he agree with the CBI's estimate that insufficient expenditure is costing industry £15 billion? After 10 years of this Government will he now agree that average expenditure on roads in real terms has been higher under Labour than under the Conservative Government?

Mr. Channon: I certainly do not agree with the last part of the hon. Gentleman's question. I am surprised that he makes that boast. No doubt he was wrongly reported in the Morning Star, and that is very understandable—

Mr. Prescott: Do you read the Morning Star?

Mr. Channon: Yes, every morning, that is where I find the hon. Gentleman's most authoritative speeches. According to the Morning Star, he is against all this expenditure. I am glad to learn that that is not the case and that he is in favour of it. I agree that we must have an adequate road infrastructure to meet the challenges of 1992 and the turn of the century. I have not read the remarks made by my right hon. Friend the Secretary of State for Wales to which the hon. Gentleman referred but I seldom, if ever, disagree with my right hon. Friend.

Trunk Roads (North-East)

Mr. Jack Thompson: To ask the Secretary of State for Transport if he will make a statement on progress in improving the trunk road systems in the north-east of England.

Mr. Peter Bottomley: The A1 between Newcastle and Morpeth and the A69 between Newcastle and Hexham are now dual carriageway throughout.

Mr. Thompson: The Minister's disappointing reply will not go down well in the north-east of England. Will he consider instituting a full-scale survey of the A69 east-west and the A1 north-south as the Romans did 1,900 years ago?

Mr. Bottomley: We shall review the whole length of both stretches of road. I do not want to prejudge the conclusions.

Mr. Amos: Will my hon. Friend undertake to look again at traffic flows on the A69 west of Hexham, as there is clearly an urgent need to dual that road all the way to Carlisle?

Mr. Bottomley: A review of the traffic on that stretch of road does not suggest that a dual carriageway is justified, but we shall see what we can do by widening and providing overtaking stretches, which is just as important.

BR Property (Accidents)

Mr. Simon Hughes: To ask the Secretary of State for Transport how many (a) deaths, (b) major injuries and (c) minor injuries there were in non-movement accidents during 1988 on British Rail property in Great Britain.

Mr. Portillo: Full railway accident statistics for 1988 will be published in the chief inspecting officer of railways' annual report later in the year. The information presently available shows 17 deaths, of which 14 were those of trespassers or suicides, 310 major injuries and 3,864 minor injuries.

Mr. Hughes: I am grateful to the Minister for those figures. Is it not clear from the recent inquest on my constituent Paul Elvin, who died at Euston, that British Rail does not enforce the rules governing the employment of contractors on its premises and that it does not comply with the rules that require it to ensure, for example, that there are circuit breakers to turn off the mains cables if there is someone on the line? Will he guarantee that the railway inspectorate will prosecute where there is clear evidence of criminal failure by British Rail and others working on its property, as that has not happened often enough in the past?

Mr. Portillo: I am not familiar with the case to which the hon. Gentleman refers, although I shall definitely look into it. These are matters for the Health and Safety Commission and the railway inspectorate. In the broadest terms, I can confirm that both those bodies have the power to prosecute when it seems appropriate to do so.

Road Assessment Studies (London)

Mr. Cox: To ask the Secretary of State for Transport what is the number of road assessment studies for London now under consideration by his Department; and if he will make a statement.

Mr. Peter Bottomley: None. Consultants have been engaged to carry out assessment studies in four parts of the capital with very severe transport-related problems. They are currently assessing and testing a wide range of options which contain some road elements. Their reports are expected later this summer. We have also commissioned a study of the area around Heathrow and south-west London.

Mr. Cox: Is the Minister aware that, whatever he may say, there is growing concern among constituents in many parts of London about the potential development of major "road improvements" in their area because they will not be improvements of the environment in which many of our constituents live; they will be problems? Will he give an assurance that, before there is any major road development in London, if local residents call for a public inquiry, he will support it?

Mr. Bottomley: Yes. I go further than that and invite the hon. Gentleman to go to the Rochester Way relief road, which was the last road built in inner London and started by the GLC under the hon. Member for Brent, East (Mr. Livingstone) and supported by a Labour council. The hon. Gentleman will see the environmental relief, the casualty reduction, and the opportunity for more jobs. I wish that the hon. Gentleman and others would spend as much time being concerned about the nearly 500 people who die every year on London's roads —the equivalent of a Sheffield Hillsborough every 10 weeks—and the thousands of people in London who are injured on our roads. Those issues need to be tackled with public transport and some road changes as well.

Oral Answers to Questions — THE ARTS

Arts Council

Mr. Knapman: To ask the Minister for the Arts when he last met the chairman of the Arts Council; and what was discussed.

The Minister for the Arts (Mr. Richard Luce): I met Lord Rees-Mogg on 21 March and we discussed a number of matters of mutual interest. I shall be meeting Mr. Palumbo in his capacity as the new chairman of the Arts Council shortly.

Mr. Knapman: I join my right hon. Friend in thanking Lord Rees-Mogg for his seven years of dedicated work for the Arts Council and welcoming Mr. Palumbo, who has some important but difficult decisions to make. Will my right hon. Friend assure the House that the principle of arm's length funding for the arts will continue?

Mr. Luce: I am grateful to my hon. Friend for his tribute to Lord Rees-Mogg for his outstanding seven years as chairman of the Arts Council and for wishing Mr. Palumbo every success in his new task. I strongly reaffirm that we shall continue to allocate funds within a given total to the Arts Council and that the arm's length principle will continue.

Mr. Robert Sheldon: Will the Minister point out that, according to the Government publication, British Business, nearly £4 billion comes from the arts and overseas earnings, and that £1·5 billion of that is from cultural tourism? Will he point out, further, that it makes economic good sense to continue subsidies at a much higher level and that is he aware that that article in a Government publication should prompt him to press the Treasury and the Government for more money for the arts?

Mr. Luce: The right hon. Gentleman is right to point out the important contribution which the arts make to the economy. Those findings emerged principally from the Policy Studies Institute, which partly funded that study. The arts world is expanding successfully with many new audiences, not just with taxpayers' money but joint partnerships in which the private sector is playing a leading role.

Mr Goodlad: Will my right hon. Friend discuss with the chairman of the Arts Council the funding of the royal national theatre? Is he aware that, despite greatly increased subventions to the Arts Council, funding for the royal national theatre has seriously fallen behind the rate of inflation and that that is a serious threat to the artistic standards of one of our greatest institutions? Will he consider direct funding by his Department along the lines of that for the British Museum?

Mr. Luce: On the latter point, I must make it plain that I wish to continue the arm's length policy. It is not right that civil servants and Ministers in Whitehall should take specific decisions on the allocation of funds to the arts. It must be for the Arts Council and regional arts associations to do that.
My hon. Friend is right to draw attention to the value of the royal national theatre, and I am grateful to him for doing that. Last year 10 per cent. extra funds were given to

the Arts Council, and part of that was through incentive funding and extra money for tourism. In both cases, the royal national theatre stands to gain.

Mr. Tony Banks: When the Minister next meets Mr. Palumbo will he discuss with him the enormous cultural contribution that is made by the British Broadcasting Corporation? At the moment, that cultural contribution to this country is being jeopardised by the Governmen is White Paper proposals on broadcasting and the hypocritical, provocative action of top management of giving themselves a 30 per cent. pay hike, while offering BBC workers a pay cut. Will he comment on that?

Mr. Luce: I welcome the hon. Gentleman to his temporary role as Opposition Front Bench spokesman on arts. However, he has not done his research because broadcasting is the responsibility of my right hon. Friend the Home Secretary. There is no doubt that broadcasting will play a key role in the arts. Under the White Paper and the proposed reforms, it has an even bigger role to play, with a wider range of choice.

Mr. Holt: Does my right hon. Friend accept that while he must not necessarily give directions in the allocation of funds, he might give a hint that when the Arts Council is giving money to American sculptors to produce a tipsy bottle as a memento of Captain Cook's discovery of Australia, he might bring some pressure to bear and not agree with the outgoing chairman that that was perfectlly appropriate spending of British money?

Mr. Luce: It is for the Arts Council to judge and for hon. Members to express their views if they like or dislike a particular form of support. However, this gives me an opportunity to say that the most important role of the Arts Council—the expenditure of money—is to strengthen the standards of excellence in the arts. That must be a priority both in London and outside and I am glad that Mr. Palumbo stressed the importance of that in his opening remarks when he first came to the Arts Council.

Greater London Arts Association

Mr. Chris Smith: To ask the Minister for the Arts when he last met the chairman of the Greater London Arts Association to discuss the structure of arts administration in London.

Mr. Luce: I meet the chairman of the Greater London Arts Association from time to time. A variety of matters is discussed.

Mr. Smith: Will the Minister ensure that as the Wilding inquiry into the structure of arts administration in London and elsewhere gets under way, part of Mr. Wilding's consideration will relate to the threat from property development to many arts enterprises and organisations in inner London? Will he do so particularly in the light of current pressures in the Tottenham Court road area where an actors' agency, two theatre groups, two film production agencies and the Directors Guild are all threatened by development proposals currently under appeal to the Secretary of State for the Environment? Will he ensure that those issues involving a major threat to the life o f valuable arts institutions in inner London will form part of Mr. Wilding's inquiry?

Mr. Luce: I take note of the hon. Gentleman's comments and I will look into it. However, I am not convinced that that is necessarily part of Mr. Wilding's terms of reference for his review, which is to look at the relationship between the allocation of money from central Government to the Arts Council and in turn to the regional arts associations, the coherence of funding for the arts and to improve the structural procedures for the disbursement of arts money.

Mr. Harry Greenway: When my right hon. Friend next meets the director of the Greater London Arts Association, will he express robust support for the new lady director of the Victoria and Albert museum in her efforts to restructure staffing at the museum in the interests of the museum and its visitors?

Mr. Luce: I recently had the opportunity last Monday to visit the Victoria and Albert museum. I am full of of admiration for the work carried out by the director, the staff, curators and administrators.

Orchestras (Rehearsal Funds)

Mr. Maclennan: To ask the Minister for the Arts what discussions he has had with the Arts Council on the allocation of funds for the rehearsal of contemporary British music by the London orchestras.

Mr. Luce: The allocation of funds to the London orchestras is a matter for the Arts Council. While I do not seek to influence the council's artistic judgments, I fully support its policy of encouraging artistic excellence, including the performance of well-rehearsed contemporary music.

Mr. Maclennan: Is the Minister aware that while it is sometimes relatively straightforward to obtain sponsorship money for the first performances of contemporary British music, it is more difficult to keep that music in the repertory? If that music is to enjoy success, it needs additional assistance. While recognising that that is primarily a matter for the Arts Council, will he at least undertake to consider discussing the matter?

Mr. Luce: That really is the reason for the answer that I have just given. Of course it is true that much sponsorship goes to the traditional arts, although there is increasing evidence that sponsorship is going towards innovative or experimental arts. That is one reason why the Arts Council has decided to use taxpayers' money to encourage the four London orchestras which play some contemporary music.

Dance

Mr. Bowis: To ask the Minister for the Arts what steps he is taking to encourage dance.

Mr. Luce: As with all art forms, I look to the Arts Council for advice about the development of dance. My hon. Friend will be aware that the Arts Council is currently considering a wide-ranging report about the future of dance.

Mr. Bowis: Will my right hon. Friend take a brisk two-step, first to the Arts Council to discuss with it the criteria by which it allocates money for the arts, and to express the concern of this House that there might be some

risk of the council not including a solution to funding for the Northern Ballet? Will he then take a brisk step on to the chairman of British Rail and discuss with him his recent statements that he may be considering withdrawing the entertainment express contract, which, of course, gives great support to touring companies, including dance companies?

Mr. Luce: On my hon. Friend's latter point, I note the concern that has been expressed by many people in the arts world. I have been in touch with the chairman of British Rail to draw his attention to the widespread anxiety about that matters and I hope that he will take these views into account.
As to dance policy, the Arts Council is considering the independent report. My hon. Friend drew attention to the Northern Ballet. There was a very impressive Adjournment debate in this House, which was widely attended. I took the chance to convey to the chairman of the Arts Council the strong views of the House, and I know that he will take those views into account.

Mr. Flannery: Did the Minister discuss with the chairman of the Arts Council the details of the Northern Ballet, Manchester, which tours more than any other company, and for which there is very deep affection throughout the north, and, indeed, in a much wider area, so that its continuance can be assured?

Mr. Luce: I can assure the hon. Gentleman that I have drawn very strongly to the attention of the chairman of the Arts Council the views of this House, which have been widely expressed, about the value of the Northern Ballet. It is, of course, for the council to make the decision. I should point out that it is not a final decision, that this is just one of a number of options that have been put forward in an independent report, which the council will have to consider shortly.

Oral Answers to Questions — CIVIL SERVICE

Trade Unions

Mr. Favell: To ask the Minister for the Civil Service when he last met leaders of the Civil Service trades unions; and what matters were discussed.

Mr. Harry Barnes: To ask the Minister for the Civil Service when he last met representatives of the Civil Service trade unions; and what subjects were discussed.

The Minister of State, Privy Council Office (Mr. Richard Luce): I have meetings from time to time with representatives of Civil Service trade unions, both centrally and during visits to Civil Service establishments. A wide variety of matters is raised.

Mr. Favell: Has my right hon. Friend had any discussions with leaders of trade unions about regional pay? Does he agree with me that earnings in the private sector vary widely from region to region, and that similar market conditions ought to prevail in the Civil Service? Does he agree that the fact that there is not regional pay is one of the greatest obstructions when it comes to Civil Service Departments moving to regions of high unemployment?

Mr. Luce: My hon. Friend must be right to draw attention to the importance of flexibility in pay in order to


cater for the problems of recruitment and retention in different areas—different in terms of skills, or geographically. In fact, my right hon. Friend the Chancellor of the Exchequer announced very recently that the maximum rate of the London pay addition will be increased to £1,000 per annum. Of course, the rates have to be negotiated. I understand that at the moment they apply to 50,000 civil servants. The recruitment and retention problems of particular areas have to be taken into account, but a degree of flexibility is now developing.

Mr. Barnes: Has the Minister discussed a 10-point code of ethics for press officers with the Institution of Professional Civil Servants, whose members are opposed to becoming political hacks? Should a Government who claim to support individualism be operating a Ministry of Propaganda from 10 Downing street?

Mr. Luce: On the question of Government publicity, there are very clearly laid down procedures. The hon. Gentleman referred to a code of ethics. I do not know whether he was referring to individual civil servants or to the question of publicity as a whole. If he was referring to individual civil servants, I would point out that in December 1987 very clear guidelines were laid down as to what steps individual civil servants may take if they have grievances.

Sir Anthony Grant: Will my right hon. Friend discuss with the Civil Service unions the essential importance of honesty among public servants? Will he warn them of the long-term consequences of breaches of confidence concerning documents in their possession, and of the effect of such breaches on democracy and democratic control as a whole?

Mr. Luce: My hon. Friend must be right to draw attention to this matter, which is of concern. It is only a tiny minority of civil servants who are doing a grave disservice to the rest of the Civil Service which provides an outstanding service to the elected Government of the day and will continue to so do.

Mr. Beith: Will the Minister advise civil servants what they should do if they form the view that their ministerial head would not mind if they leaked certain correspondence, such as letters from the Solicitor-General?

Mr. Luce: The position is absolutely clear. There are disciplinary procedures which the permanent secretary of the particular Department can take. If a civil servant disobeys the rules, disciplinary proceedings can be taken.

Mr. Boswell: Will my right hon. Friend take a fresh look at the possibility of introducing an entirely independent assessment of disputes in the limited number of cases, sometimes involving principle rather than large sums, where Ministers have been unable to resolve the matter to the satisfaction of hon. Members and their constituents?

Mr. Luce: I am not absolutely certain to what my hon. Friend is drawing attention, but if he can provide me with further information, I shall look into the matter.

Dr. Marek: Does the Minister agree that in the past there was no need for a code of practice for information officers but that with the present incumbent of 10 Downing street the position is different? Does he agree that it is wrong of Mr. Bernard Ingham to tell the police who its

director of public affairs should be and wrong of any Minister to ask any information officer to enter the political arena? Will he, therefore, pursue the establishment of an impartial and mutually agreed code of practice for information officers and ensure that there is no victimisation if it is invoked by any civil servant?

Mr. Luce: The procedures are clearly and carefully laid down and there are no difficulties with them. Each Department has a clear understanding of what they are. I am not sure what the hon. Gentleman is worried about.

Civil Servants (Legal Qualifications)

Mr. Rooker: To ask the Minister for the Civil service how many civil servants have a legal qualification.

Mr. Luce: There are about 2,500 lawyers in the Civil Service.

Mr. Rooker: As only two of those lawyers are allocated by the serious fraud office to deal with the House of Fraser-Lonrho affairs and as one of them advised against and was overruled only by the assistant director, Ms. Chase, could we have a few more Government lawyers put on this case so that at least they can begin to get round to interviewing the leading protagonists? Obviously, with only two on the job, they have not got round to doing that.

Mr. Luce: I have enough questions to answer in the House and I will not be drawn into answering on the Lonrho case. Although we have had some success in recruiting lawyers for the Government legal service and the Crown prosecution service, we are still short of a large number.

Recruitment

Sir Hal Miller: To ask the Minister for the Civil Service whether he intends to change the procedures for recruitment into the Civil Service; and if he will make a statement.

Mr. Luce: In the light of current developments in Civil Service management, Departments will be free to carry out their own recruitment to all except the senior grades and their fast stream feeder entries, subject to rules laid down to safeguard the principle of selection on merit by fair and open competition. I announced these plans on 13 April 1989 in a written reply to my right hon. Friend the Member for Worthing (Mr. Higgins).

Sir Hal Miller: While I am sure that the Departments would welcome the greater freedom and responsibility thus imposed on them by the Minister, how will he assure the rest of us that the quality of service, seniority and qualifications will be ensured so that throughout the country we may maintain the level of service and the morale of the Civil Service?

Mr. Luce: I hope that in general the concept of delegating more authority to individual Departments to carry out the bulk of their recruitment policies is the right. one. They are in the best position to judge what recruits they need. Nevertheless, I acknowledge my hon. Friend's point about the need to maintain the highest standards. It will be up to the commission to recommend to the Minister for the Civil Service rules that should be followed by all


Departments relating to such matters as, for example, fair and open competition, selection on merit and the impartiality of the service.

Mr. Haynes: Is the Minister aware that there are difficulties in appointing civil servants? I remember the Minister coming to the Dispatch Box and telling me that he had been to their annual conference. I asked him what the morale was like at that conference. It was not very good. That was because of the Government's massive cuts in local government. Why do the Government not back off and make the money available? Then we would get the right people for the jobs?

Mr. Luce: It is interesting that the hon. Gentleman believes that I have responsibility for local government as well as for the Civil Service. I visit Civil Service offices around the country, so I can tell the hon. Gentleman that the vast bulk of the Civil Service is doing an outstanding job and its morale is good. It is a slimmed-down, highly professional and very impartial service.

Agencies

Mr. Watts: To ask the Minister for the Civil Service how many Civil Service agencies have now been announced; and whether he will make a statement.

Mr. Luce: Five executive agencies have now been established following the launch last week of the National Weights and Measures and Warren Spring Laboratories. Around 30 more have been announced as candidates.

Mr. Watts: In thanking my right hon. Friend for that encouraging reply about progress so far, may I ask him to tell the House what other candidates are at present under active consideration, and when he will be in a position to make a further statement?

Mr. Luce: I am grateful to my hon. Friend. I have undertaken to give regular reports to the House on the

progress of Civil Service agencies. Within the next two or three months there should be statements about a number of other areas, including the Queen Elizabeth II conference centre, the Department of Social Security's resettlement units and the employment services. There may, of course, be others, too.

Mr. Charles Powell

Mr. Dalyell: To ask the Minister for the Civil Service if he will arrange for Mr. Charles Powell to give a lecture at the Civil Service college.

Mr. Luce: There are no plans to do so.

Mr. Dalyell: How about a title such as, "Recent developments in Civil Service ethics, which allow a principal private secretary to the Prime Minister to authorise and to give approval to the unauthorised disclosure of a Law Officer's letter"? If that title is not good enough, how about, "The role of a principal private secretary to the Prime Minister in preserving the Prime Minister from a position of having misled the House of Commons and the consequences of misbehaviour"?

Mr. Luce: I am not sure how many times over the past three years that the hon. Gentleman and I have had exchanges across the Floor.

Mr. Dalyell: Seventeen.

Mr. Luce: I am grateful to the hon. Gentleman for providing me with that additional information. It feels like 17. The position is absolutely clear. We have made statements time and again in the House. I am glad to say that Mr. Powell, who served me in 1980 when I was Minister of State for Foreign and Commonwealth Affairs with responsibility for Africa, is an outstanding civil servant.

Airport Security

The following Question stood upon the Order Paper:

Mr. David Evans: To ask the Secretary of State for Transport what recent steps have been taken to help improve security at Britain's airports; and if he will make a statement.

The Secretary of State for Transport (Mr. Paul Channon): Immediately after Lockerbie increased security measures were ordered for American airlines, particularly for hold baggage. Soon afterwards I decided to bring in further measures for them in relation to cabin baggage, hold baggage and cargo. On 6 April I announced a package of measures to provide better security of restricted areas and for aircraft, passengers and baggage in those areas.
I have now set firm objectives for a further tightening of security, particularly in relation to items that might be used to conceal explosive devices; the screening of all hold baggage; cargo, mail and courier, consignments; the physical separation of inbound and outbound passengers; and the design of aircraft interiors.
I intend to more than double the strength of my Department's aviation security division so that it can carry out more inspections and spot checks, as well as special surveys to determine whether new measures are needed. To emphasise its monitoring role, the team of aviation security advisers will be reconstituted as the aviation security inspectorate.
There are certain areas where my powers under the Aviation Security Act 1982 are more limited than I should like. I shall therefore seek new powers from Parliament to secure more effective implementation of security measures.
I am doubling the budget for the current financial year for research and development into equipment, to include the continuing examination of commercially available equipment and the development of new techniques for the detection of explosives.
We have now received the Federal Aviation Administration's proposal to install one of the first production thermal neutron analysis machines at Gatwick or Heathrow later this year. We have kept in touch with progress on a similar British project and we are discussing with its sponsors the possibility of funding further work.
With the United States of America we initiated an ambitious programme of work by the International Civil Aviation Organisation designed to improve security standards worldwide. I look forward to a further discussion with the United States Secretary of Transportation when he visits London later this week.
My written answer today to a question from my hon. Friend the Member for Wealden (Sir G. Johnson Smith) gives further details of my review of aviation security.

Mr. David Evans: I thank my right hon. Friend for those far-reaching initiatives, which I am sure the House will also welcome. Could he be more specific about what he means by his reference to tightening up the security services? In future, will airports be safer place to which to go? When will the initiatives be implemented?

Mr. Channon: The timing of the initiatives will vary. Some of those that I have announced this afternoon will

take some time to implement, but my hon. Friend will know that I announced a package of measures on 6 April, some of which can take effect almost immediately.
The initiatives I have announced today are part of a continuing process. This is not the end and we shall continue to improve aviation security. I am now aiming for a set of internationally agreed rules on security procedures on, for example, radios and other electrical items. I am tightening up the requirements for screening hold baggage and the security requirements for cargo. I assure my hon. Friend that there is still more to be done, but I am determined to do anything within my power to improve security at airports.

Mr. Donald Anderson: Would not this question have been better answered by way of a statement? Will the new powers that the right hon. Gentleman is seeking from Parliament be sought in this Session because of their urgency? What will be his response to American pressures to impose their standards on our airports?

Mr. Channon: My answer today represents a progress report on the continuing review of security. I made some announcements on 6 April and I am always open to the House to make a statement, if that is what it would like. My hon. Friend the Member for Welwyn Hatfield (Mr. Evans) had a question down and it seemed right that I should answer it at the end of Question Time as his question was not reached earlier.
It is not for me to say exactly when the required legislation will come forward, but it will do so at the earliest convenient date. There is, however, already a heavy programme of legislation for the present Session of Parliament.
With regard to the United States Government, I am looking forward to discussing the relevant matters with the Secretary of Transportation during the next few days. We are in total agreement about the need to improve aviation security. If there are any differences, which I doubt, I am sure that they are small ones that can be resolved quickly.

Mr. Terence L. Higgins: Is my right hon. Friend aware that it is sensible to take a question at the end of Question Time occasionally when most people who are interested in a particular subject happen to be in the House? Can my right hon. Friend be more specific about the proposals he has in mind with regard to extending the 1982 Act? I welcome the doubling in the budget that my right hon. Friend has mentioned.

Mr. Channon: I am grateful to my right hon. Friend. We worked off the questions today and, as my right hon. Friend has said, this is a time when most people interested in transport are likely to be here. I shall try to ensure that the aviation security inspectorate, which I have announced, will have adequate powers to ensure that aviation security requirements are properly implemented. I also want to consider whether there should be sanctions for lax security or powers over persons other than airports or airlines. At the moment the powers are limited to airports and airlines.

Mr. Jeff Rooker: When the Secretary of State meets Secretary Skinner for discussions, will he ask him about recent reports that show that just a few hours before the Lockerbie disaster the United States issued further warnings of immediate priority about possible hijacks or explosions on aircraft, which,


admittedly, Secretary Skinner's Department did not pass on to the British Government? Will he take up that matter with the United States Secretary of Transportation?

Mr. Channon: I shall examine what the hon. Gentleman has said. As to the general question of Lockerbie, the House will know that I made a full reply to a question put by the Leader of the Opposition on 21 March. At this stage I
have nothing else to add.

Mr. Nicholas Soames: I congratulate my right hon. Friend on this package. Is he now satisfied with the arrangements for liasion between the British Airports Authority and his Department on security matters? Has he given any consideration to the establishment of a land border guard similar to that in Germany and other countries with specific control of airport security alone?

Mr. Channon: No, so far we have not considered that matter. Obviously we shall keep airport security under continuous review, and what my hon. Friend has suggested is an important subject which needs further study. At the moment however, I do not believe that it would be an appropriate procedure for the United Kingdom.
I am satisfied about liaison with BAA. Between us we must work to try to ensure improved airport security. The House must be under no illusions, however, of the great difficulties that always exist in this regard. At Heathrow, 50,000 people are employed and 100,000 people are employed at the four largest airports of the United Kingdom. I shall do my best, and so will my officers and all those concerned, to improve security at airports, but the House will be aware from the figures I have given what an enormous task it is.

Mrs. Gwyneth Dunwoody: Does the Secretary of State agree that one of the problems is the number of subcontractors, who have a rapid turnover of staff? As it is known that it takes at least three months to get a security clearance, is it not obvious that the rules applying to subcontractors working at major airports must be not only clearly laid out but rigidly enforced?

Mr. Channon: It could well be that the powers I seek to take in due course will cover the specific point which the hon. Lady has raised and about which she is quite correct. She has put her finger on an important problem.

Mr. Robert McCrindle: I revert to the matter of the discussions that my right hon. Friend is to have with the United States Secretary of Transportation. Has my right hon. Friend seen reports that the American authorities intend to seek to impose their standards of security on what, to them, are foreign airlines and foreign airports? As, by implication, that would mean an attempt by the United States to impose its rules on British airways at Heathrow and Gatwick, will the Secretary of State, in discussions with Secretary Skinner, make clear to him that such a proposal would not be acceptable and that the rules relating to British airports and airlines must remain firmly with the Department of Transport and other agencies in this country?

Mr. Channon: My hon. Friend is entirely right about that point. I shall want to discuss this matter with Mr. Skinner, bearing in mind that the United Kingdom

Government are responsible for aviation security in this country. I am sure that the object of the American initiative is to achieve better security in other countries, where, perhaps, Governments do not take their responsibility in this area as seriously as we do. I am sure that we will have no problem about this matter and that we will amicably conclude our discussions, because both Governments share a belief in the overriding need to improve security. We have worked extremely well together in Montreal at the International Civil Aviation Organisation, and I am sure that we will do so again on this occasion.

Mr. Dennis Skinner: How much new money will be spent on this package of proposals? Will it be greater or less than the £500 million doled out by the Prime Minister to save a dozen Tory-held Kent constituencies? Is this Government more concerned about looking after their interests in constituencies they hold than in saving lives?

Mr. Channon: The serious answer to the hon. Gentleman's question is that, if there are security requirements that should be enforced on their merits, lack of finance will in no way be allowed to stand in the way.

Mr. Robert Adley: I appreciate the importance of the figures to which the Secretary of State referred a few moments ago of the huge number of employees involved at airports, and I also recognise that the West German authorities and PanAm, to name just two groups involved, are trying to put the blame for what has happened on this country. However, will my right hon. Friend confirm that, when it comes to the security of aircraft and to the checking of baggage and tickets, the airlines are responsible and must be forced to carry out their duties properly?

Mr. Channon: It is extremely important that airlines carry out their duties properly. Being well aware of the fact, the airlines are energetically following this course. My hon. Friend is right to draw attention to that point. We are continually emphasising to airlines the great importance of the security measures they should undertake.

Sir Anthony Grant: Can my righ hon. Friend assure us that the checks at airports to detect persons carrying explosives are as scrupulous as the checks made of persons entering the Palace of Westminster?

Mr. Channon: That is certainly what I intend should occur, and I hope that it will. It must be the rule that, if security staff are in any doubt about a radio, a cassette recorder or other item being carried, they should forbid its carriage.

Mr. John Prescott: I must protest that the Secretary of State has just given what was really a statement. In fact, he spends most of his time either avoiding making statements to the House or using Question Time to make points. As all hon. Members know, under the procedure for statements in this place, an hon. Member can obtain a copy of the statement and make a judgment about it.
The Secretary of State knows that, if what he said today in his statement improves security at airports, we will welcome it, because mistakes and confusion which affect airport security alarm American and other authorities.
Will the Secretary of State confirm that most of the recommendations that he has just made were made by the Select Committee in 1986 but were then totally rejected by the Department? The right hon. Gentleman confirmed that rejection a few weeks ago in correspondence to me. What made him change his mind? I am pleased that he has changed his mind, because checks on luggage into Heathrow will improve security, but how much will it cost, and will that cost be borne by the passenger or the taxpayer, or financed by a levy fund system as recommended by the Select Committee? The last method is the one overall way to deal with the financing of airport security.
What about the other recommendation of the Select Committee that there should be someone in overall control of security and directly responsible when a mistake such as those that we have seen in the past few months is made?
As the Secretary of State referred to the view of the Americans—there is a report about it in The Independent today—can he tell us whether he agrees that the American authorities feel that our security is so bad that they will impose their higher conditions of security on their aeroplanes? That is a comment on our level of security. Does the Secretary of State accept that, as he so often avoided his responsibilities by saying that the breach of airport security on the PanAm flight was the responsibility of PanAm, the operator, rather than his responsibility, that is why the Americans take the view that there is inadequate security and control, particularly by the Secretary of State, of airport security in the United Kingdom?

Mr. Channon: That was a typical question from the hon. Gentleman. If he thinks that I spend my time trying to avoid making statements to the House, I may say that I have not been particularly successful over the past few months.
To answer the question put by my hon. Friend the Member for Welwyn Hatfield (Mr. Evans), I have announced a progress report on what is a continuing review.
To answer the hon. Gentleman, the cost will be borne by the passenger; extra costs on airlines and airports will inevitably be passed on. I am not persuaded by the case for a levy, which would raise no new money. It is merely a way of transferring money from one pocket to another and will not raise a single extra halfpenny. The person in overall control is the airport manager, and the new inspectorate will have an important role in inspecting airports even more energetically than at present. I reject completely the hon. Gentleman's view of the United States' opinion of our aviation security. There is not the faintest evidence to back up his unfounded and irresponsible claim. I shall be discussing this matter with Mr. Skinner, and I shall be amazed if he takes the Prescott line.

Arms Trafficking (Paris Arrests)

Mr. Gerald Kaufman: (by private notice): To ask the Secretary of State for Foreign arid Commonwealth Affairs if he will make a statement on Government policy following the arrest in Paris of three members of the Ulster Defence Association in the company of a South African diplomat on a charge of illegally possessing weapons.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): We have been informed by the French authorities of the arrest in Paris of three United Kingdom citizens and one American on 21 April on charges of arms trafficking, receipt of stolen goods, and criminal conspiracy of a terrorist nature. Consular access is being sought to the three United Kingdom citizens.
The Government are seriously concerned at the implications of the charges brought by the French authorities. The matter is sub judice and it is extremely important not to prejudice the French legal proceedings in any way. The South African ambassador in London was today summoned to the Foreign Office to be told of the grave view taken by the British Government of the implications of the charges and of the alleged involvement of a member of the South African embassy in Paris. The House will wish to be assured that since the initial reports of thefts in Northern Ireland became known my right hon. Friend the Secretary of State for Northern Ireland has been subjecting security arrangements at Shorts and other establishments in Northern Ireland to a most thorough review.

Mr. Kaufman: I congratulate all involved in the successful operation in Paris.
Does not that operation reveal an alarming state of affairs—a conspiracy whereby South Africa has supplied so-called Loyalists with lethal weapons for use in terrorist actions in Ulster in quest of access to information, replicas and models of British missiles? In view of a succession of successful burglaries at Shorts, can the right hon. and learned Gentleman guarantee the security of the Starstreak missile in particular, as well as Javelin and Blowpipe?
Is it not a fact that weapons supplied by South Africa as part of this bloodstained deal have already been responsible for the deaths of innocent people in Northern Ireland and that grenades supplied by South Africa have been thrown at the police in Northern Ireland?
In the knowledge of the fact that South Africans have supplied arms for murder in Northern Ireland, did the Forein Secretary raise this act of aggression when he met the South African Foreign Minister last month? Did the Prime Minister do so when she met that same Minister this month? How can the Prime Minister have told a South African newspaper:
I consistently have made clear the total opposition and abhorrence of the British Government for terrorist actions
when she must have known that the South Africans have been responsible for making possible terrorist action inside the United Kingdom?
Today, all hon. Members have received a letter from the Foreign Secretary declaring:
our message is getting through where it matters most—inside South Africa".


Is this conspiracy the response to that message? Is this conspiracy the response to the tact and persuasion that the Prime Minister says she uses with South Africa?
Will the right hon. and learned Gentleman consult other European Community Foreign Ministers urgently to obtain united action, involving the expulsion of all South African intelligence agents and arms purchasers posing as diplomats? Will he call back the South African ambassador in London and tell him to withdraw all members of his staff with duties comparable to those of Mr. Storm?
Will the Government now cut off to South Africa all supplies of equipment, spare parts and vehicles which can be used for military purposes? Is it not time that Britain acted in line with world opinion and imposed sanctions on South Africa's incorrigible regime?

Sir Geoffrey Howe: I can begin by thanking the right hon. Gentleman for his congratulations to those concerned with bringing this matter to the state it has so far reached. I find it difficult to agree with several of the other points that he raised.
The right hon. Gentleman will surely acknowledge that the success of this operation thus far underlines the extent to which the Government have been, are and remain totally committed to enforcement of the United Nations arms embargo to South Africa. That is why I said that we take an extremely serious view of the facts so far disclosed in this matter. I emphasise "the facts so far disclosed" because it is by a long way too early to come to any conclusions about the implications of this matter, let alone some of the earlier ones to which the right hon. Gentleman referred.
The right hon. Gentleman is quite right to emphasise the need for the closest possible attention to security in relation to manufacturing processes in Northern Ireland. I have said that my right hon. Friend the Secretary of State for Northern Ireland is closely concerned with that.
The right hon. Gentleman will understand that we are well aware of the nature of some of the agencies and authorities that are involved in a matter of this kind. That is all the more reason for working in a manner which is most effective to secure the removal of apartheid from South Africa. It is our continuing and firm belief that the present policy of the Government is best calculated to achieve that end.

Sir Ian Lloyd: Will my right hon. and learned Friend accept that I regret every bit as much as he does the rather deplorable events which have occurred in Paris during the past 48 hours? If, as has been suggested in the House today, South African weapons have given rise to terrorist action in Ulster, that is a profoundly regrettable consequence. However, before my right hon. and learned Friend reaches a final conclusion, will he bear in mind the fact that many of us, including many of my constituents, take just as grave a view of the way in which SWAPO and the ANC obtain SAM-7 and Stinger-type missiles so that the South Africans are compelled by the international arms embargo to resort to deplorable methods to obtain arms themselves?

Sir Geoffrey Howe: I do not think that I should join my hon. Friend in discussing SWAPO's access to weapons in different circumstances, save to underline the extent to

which we deplore the use of violence as a means of promoting political objectives in southern Africa as in our own country. However, I am glad to have his endorsement of the view that I have expressed that the implications of the facts so far disclosed could be extremely serious, and the fact that he has endorsed that is significant.

Mr. Menzies Campbell: Does the right hon. and learned Gentleman accept that the military importance of the incident we are discussing is demonstrated by the fact that the South African Government were apparently willing to pay £1 million for the model of the missile which was sought to be obtained in Paris? He has also told the House that a review of the security has been taking place. If that is the case, why did the Minister of State for the Armed Forces say in response to a written question from me:
Security of all Ministry of Defence establishments and bases is kept under constant review as a matter of course. I have no plans at present to commission a specific investigation into security at territorial army bases in Northern Ireland."—[Official Report, 20 April 1989; Vol 151, c. 278.]

Sir Geoffrey Howe: On the hon. and learned Gentleman's last point, I cannot comment on the precise formulation of the matter to which he has referred, but I can assure him that since the initial reports of security risks and thefts came to light, my right hon. Friend the Secretary of State for Northern Ireland has set in hand a very close review of security at such premises. I cannot confirm or deny the specific figure that the hon. and learned Gentleman mentioned, but it goes without saying that the South African authorities are prepared to go to considerable lengths to outwit the United Nations arms embargo. That is why we apply ourselves so energetically to upholding its enforcement.

Mr. Ivor Stanbrook: Is there any evidence that South African weapons have been used in terrorist incidents in Northern Ireland, as the right hon. Member for Manchester, Gorton (Mr. Kaufman) claimed?

Sir Geoffrey Howe: I cannot offer the House any concluded judgment on that today, but obviously if it were firmly established it would add to the gravity of a serious situation.

Rev. Martin Smyth: Will the Secretary of State shed further light on the incident, as we have only press speculation? I do not want to speculate as to whether any court proceedings are developing but is there any truth in the suggestion by the right hon. Member for Manchester, Gorton (Mr. Kaufman) that the UDA was involved? Furthermore, on a day when the people of south Belfast have suffered another terrorist attack on a police station and after a weekend when women have been murdered, is it not rather hypocritical to spend time attacking South Africa when the ANC and the IRA have been collaborating in the attack on British people in Northern Ireland?

Sir Geoffrey Howe: On the hon. Gentleman's first point, it is not possible to be more specific about a number of matters that have been raised for discussion by the facts so far reported, not only because we do not wish to say or do anything that may interfere with the conduct of proceedings in France—which is important—but in addition, one has to take care about the revelation of


sensitive material in answer to any further questions. The inescapable fact is that any involvement on either side of the tragic conflict in Northern Ireland involving the supply of weapons that may add to the hazard to life and limb there is to be deplored, and any fresh aspect of it raises serious questions.

Mr. Derek Conway: My right hon. and learned Friend will have the support of the whole House in deprecating the stealing of weapons. Bearing in mind that the Government wisely operate an arms embargo policy against South Africa, has my right hon. and learned Friend or any of his ministerial colleagues received any evidence from the Opposition about the illegal supply of arms as was suggested by the shadow Foreign Secretary? I have heard of no such evidence being put forward, yet the fact that we have an official arms embargo is rarely recognised by Opposition Members.

Sir Geoffrey Howe: I can assure my hon. Friend that any suggestion of the supply of weapons in breach of the arms embargo is always investigated with the utmost thoroughness. I hope that he will accept, as does the rest of the House, that the facts I have so far disclosed today suggest that that thoroughness is not in vain.

Mr. Merlyn Rees: The supply of arms to Northern Ireland is one of the major reasons why the tragic events of the past 20 years have lasted so long. In a country in which relatively few people are involved in violence, the arrival of those weapons, whether from Colonel Gaddafi or money given to the United States, and whether they go to Republican or Loyalist organisations, does not matter much. What matters is that the arms are getting through.
Will the Foreign Secretary ensure that we receive accurate information as to whether it is true, as is reported in the newspapers, that the UDA—a working class group —has received arms from South Africa and that now the new organisation, which I understand is a middle class group that has arisen in the past year or two, also has arms contacts in South Africa? One way of stopping the supply of arms is to know more about the people involved. I had never heard of the movement until a few weeks ago. It is an insidious development, and I hope that we can have more information.

Sir Geoffrey Howe: The right hon. Gentleman is correct to remind us of the central fact, which is that the availability of any weapons on either side of the troubled Province of Northern Ireland is a matter that we must do everything possible to prevent. One cannot be sure where they will end up or what will happen to them. That is why we are making such an enormous effort to try to achieve that.
The facts and evidence underlying the matters I have announced today have not yet been fully explored, but it is entirely right that at the right time and in the right way every possible use should be made of them to identify those responsible for the acquisition, financing and importation of those weapons. Every action should be taken thereafter to demonstrate how seriously we view the matter and how determined we are to stamp it out.

Mr. Robert Adley: Will my right hon. and learned Friend accept that most impartial people would regard these events, if they are proved to be true, as

every bit as reprehensible as the relationship that appears to exist between the IRA and Libya? If the charges are well founded and those concerned are found guilty, will my right hon. and learned Friend consider our diplomatic relationships with South Africa in the light of the decision taken some time ago about our diplomatic relationships with Libya?

Sir Geoffrey Howe: I understand why my hon. Friend is concerned about the possible gravity of some of the implications of the facts so far known and I appreciate that concern. However, we must acknowledge that the shape and nature of diplomatic relations must be considered in the light of many different considerations, one of which is the extent to which we are able to continue representing to the Government of another country the case we feel strongly needs to be taken into account.

Mr. David Winnick: When will the Foreign Secretary recognise that South Africa is willing to do the maximum damage to Britain's interest, as is Libya, in supporting the other side of terrorism in Northern Ireland? Does he recall the case in Coventry just five years ago when the South African authorities double-crossed the British Government and the judicial authorities and the people who were bailed did not return to Britain? Is it not time we started to recognise the immense danger to this country of South Africa's terrorist activities, including acts of terrorism carried out in various parts of Europe? When he sees the ambassador, I hope that he will tell him of the strength of feeling in the House of Commons.

Sir Geoffrey Howe: It is clear from what has already been said on both sides of the House that there is grave concern at the implications of the facts so far known in this matter. I shall take care to ensure that the South African Government are in no doubt about that. The precise extent to which this or that action should be equated with the action of any other Government has to be considered in the light of all the circumstances. We should leave every Government in no doubt that the promotion of the supply of weapons for violent, terrorist purposes within this Kingdom is a matter of the utmost seriousness.

Mr. Robert Hughes: Will the Foreign Secretary take this opportunity to refute as totally unfounded and disgraceful suggestions that the African National Congress has been collaborating with the IRA to murder British citizens? Does he recollect that the South African Government boasted that they would not send back from South Africa people charged in this country with breaching the oil embargo who had been allowed to return under the gravest assurances given by the South African embassy? Now that South Africa has become involved in affairs in Northern Ireland, would it not make more sense, rather than simply calling in the ambassador to tell him how displeased he is, if the Foreign Secretary insisted that the military attaché department in Trafalgar Square was closed and the South African ambassador was sent back to South Africa as a mark of our intention to do something other than simply mouth platitudes?

Sir Geoffrey Howe: The hon. Gentleman will know that. all allegations of links between the ANC and the IRA and any other terrorist organisations are thoroughly investigated. It is made clear to the ANC, as to other organisations, that it is entitled to remain in this country so long as it complies with our laws.
The hon. Gentleman will recall that the case which came before the Coventry courts was last dealt with in a statement on 23 October 1984 by my right hon. and learned Friend, now the Secretary of State for Scotland, when he was Minister of State, Foreign and Commonwealth Office.
The hon. Gentleman will recall that in September 1985 Community countries agreed to recall military attachés accredited to South Africa and to refuse to grant accreditation to new South African military attaches. British attachés were withdrawn from South Africa in 1985, the South African armed forces attaché left London in July 1987 and the air and naval attaché left in December 1987.

Mr. Jeff Rooker: In the last year for which we have figures, 1986–87, this country was the world's second largest arms supplier behind the United States and ahead of the Soviet bloc. Is it not evident that our factories and manufacturing plants involved in that trade, which amounts to about £6 billion a year in exports, are bound to be prey to Governments such as the South African Government who exist only because of their use of weapons? Will the Foreign Secretary have words with his Cabinet colleagues to ensure that, notwithstanding the policy to continue with a massive trade in weapons, at least the security of the factories and the people working in them is greatly enhanced?

Sir Geoffrey Howe: The hon. Gentleman is right to emphasise the importance, in any country supplying weapons on any scale, of the tightest possible control over the licensing and export of any such weapons and the places in which they are stored and manufactured. As I have already said, that is a matter of which my right hon. Friends are well aware.

Several Hon. Members: rose—

Mr. Speaker: Order. This is an extension of Question Time, and we must move on as we have a heavy day ahead of us.

Statutory Instruments, &c.

Mr. Speaker: With the leave of the House, I shall put together the Questions on the two motions relating to statutory instruments.

Ordered,
That the Draft Double Taxation Relief (Taxes on Estates of Deceased Persons and Inheritances and on Gifts) (Sweden) Order 1989 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Beef Special Premium (Protection of Payments) Order 1989 (S.I., 1989, No. 574) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Dorrell.]

Points of Order

Mr. Harry Cohen: On a point of order, Mr. Speaker. We have just had a private notice question about Blowpipe missiles. At present the destination of Blowpipe missiles is—

Mr. Speaker: Order. I am sorry that I was not able to call the hon. Gentleman; he was not alone in that. A private notice question is an extension of Question Time and I allowed nearly 20 minutes on it, which is much longer than I would normally allow for a question.

Mr. Cohen: rose—

Mr. Speaker: Order. It is selfish of the hon. Gentleman to persist. If it is a matter of order, I shall deal with it, but not if it is an extension of Question Time.

Mr. Cohen: On a point or order, Mr. Speaker. I am asking a question of you, Mr. Speaker, not of the Minister. At present questions about the supply of Blowpipe missiles to the terrorists in countries such as Nicaragua or Afghanistan are blocked by the Table Office. As we have now been able to ask questions about it on the Floor of the House, will you take steps to unblock the tabling of such questions in future?

Mr. Speaker: That is not a matter for me.

Mr. Nicholas Bennett: rose—

Mr. Dennis Skinner: rose—

Mr. Speaker: Hon. Members should look at the Order Paper to see how much business we must get through today.

Mr. Bennett: On a point of order, Mr. Speaker. May I ask for your advice on a serious matter concerning freedom of speech? The House jealously guards its right of freedom of speech, and hon. Members have a duty to protect it, which includes the process by which hon. Members are elected. Conservative party election posters in the Vale of Glamorgan have been wantonly destroyed by the hon. Member for Carmarthen (Mr. Williams). Has he approached you, Mr. Speaker, about making a statement?

Mr. Speaker: That is not a matter of order in the House.

Mr. Skinner: On a point of order, Mr. Speaker. This has nothing to do with exchanges, but you, Mr. Speaker, may have heard the Secretary of State for Foreign and Commonwealth Affairs refer to the procedure in a French court as being sub judice. Since the Wright case, it has been generally accepted that the sub judice rule applies only to British courts.

Mr. Speaker: I did not hear the Secretary of State say that, but if he did I must tell hon. Members that the matter may be sub judice in French courts but it is not yet so in Ours.

Mr. Alan Williams: On a point of order, Mr. Speaker. Will you confirm that the Chair has no power if a Minister chooses to answer a question lifted from the Order Paper rather than make a statement, thereby excluding you, Mr. Speaker, from the parliamentary process? Did the Minister seek your authority to make


a statement? Will you confirm that the effect of the procedural device, compared with a statement, used by the Secretary of State—he has been under much pressure lately and we understand that he is aware of his vulnerability—is that, first, it restricts the amount of time available—although you, Mr. Speaker, allowed every hon. Member who stood to take part and we are grateful for that? Secondly, it limits the Opposition Front Bench spokesman to a single intervention at the end of the statement. Thirdly, and most important, because that device was used, my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who had to put up with snide comments from the Secretary of State, had no prior knowledge of the statement's contents, which is a normal courtesy, and therefore had no opportunity to consider the details of a matter that is of profound national importance, in which the Minister's previous incompentence has been a matter of grave national concern.

Mr. Speaker: The House should understand that, because of the shuffle, the question might have been answered earlier. If we had not reached oral question No. 35 today, it would have received a written answer. No request for a statement was made, and the right hon. Member for Swansea, West (Mr. Williams) rightly said that I have no authority to stop questions being answered at the end.

Mr. Edward Leigh: You, Mr. Speaker, may have noticed from today's Votes and Proceedings that there are already 736 early-day motions on the Order Paper, a large proportion of which have been tabled by Opposition Members, who are keen to climb on any bandwagon. Will you raise with the printers of the Votes and Proceedings the strange absence of an early-day motion, which Opposition Members have surely tabled under our democratic procedures, condemning the unwarranted invasion of personal property perpetrated by the hon. Member for Carmarthen (Mr. Williams) of ripping down election posters—an act that was witnessed by television cameras?

Mr. Speaker: So far as I know, such an early-day motion does not appear on the Order Paper, but it may well do so tomorrow.

Mr. Tony Banks: On a point of order, Mr. Speaker. You said that if question No. 35, which was tabled by the hon. Member for Welwyn Hatfield (Mr. Evans), had come up earlier in the shuffle the Secretary of State could have answered it. What is the purpose of having the shuffle if Ministers can decide what questions they will answer by making a statement from the Dispatch Box?

Mr. Speaker: That is a matter for the Minister, but the hon. Gentleman well knows that we have had a private notice question on this matter from the Leader of the Opposition. It is a matter of considerable interest to the House. I said that oral questions that are not reached on the Order Paper receive a written answer.

Orders of the Day — Social Security Bill

As amended (in the Standing Committee), considered.

Ordered,
That the Social Security Bill, as amended, be considered in the following order, namely, any new Clauses standing in the name of a member of the Government, any new Schedules standing in such a name, other new Clauses, amendments relating to Clauses 1 to 16, Schedule 1, Clauses 17 and 18, Schedule 2, Clause 19, Schedule 3, Clause 20, Schedule 4, Clause 21, Schedule 5, Clauses 22 and 23, Schedule 6, Clauses 24 to 30, other new Schedules, amendments relating to Schedules 7 and 8.—[Mr. Moore.]

New Clause 7

AMENDMENTS RELATING TO PRIMARY CLASS I CONTRIBUTIONS

`(1) In section 4 of the principal Act, for subsections (6) to (6B) (computation of primary Class 1 contributions) there shall be substituted—
(6) Where a primary Class 1 contribution is payable, the amount of that contribution shall be the aggregate of—

(a) the initial primary percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as does not exceed the current lower earnings limit; and
(b) the main primary percentage of so much of those earnings as exceeds that limit but does not exceed the upper earnings limit;

but this subsection is subject to regulations under subsection (7) below or sections 128 to 132 below and to section 27 of the Pensions Act (contracted-out rates).
(6A) For the purposes of this Act the primary percentages shall be as follows—

(a) the initial primary percentage shall be 2 per cent.; and
(b) the main primary percentage shall be 9 per cent.; but the rates of those primary percentages are subject to alteration under sections 122 and 123A below.

(6B) In the case of earners paid otherwise than weekly, any reference in subsection (6) above to the current upper, or (as the case may be) lower, earnings limit shall be taken as a reference to the prescribed equivalent of that limit."(2) In subsection (6F) of that section (alteration of number of primary or secondary brackets) the words "primary
or" shall be omitted.
(3) In section 122 of that Act (additional power to alter contributions) for paragraph (a) of subsection (1) there shall be substituted—

"(a) the percentage rate specified—

(i) as the initial primary percentage in section 4(6A)(a);
(ii) as the main primary percentage in section 4(6A)(b);"

(4) In subsection (4) of that section (variation of rates for purpose of adjusting Redundancy Fund) for paragraph (a) there shall be substituted—

"(a) the percentage rate specified—

(i) as the initial primary percentage in section. 4(6A)(a);
(ii) as the main primary percentage in section 4(6A)(b); ".

(5) In subsection (6) of that section, for paragraph (a) (maximum variation in Class 1 rates of 0·25 percentage points there shall be substituted—

"(a) to increase for any tax year—

(i) the percentage rate of the initial or main primary percentage, or
(ii) the percentage rate for secondary Class 1 contributions,


to a percentage rate more than 0·25 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage or secondary Class 1 contribution in question; or"

(6) In section 123A of that Act (further power to alter certain contributions) for subsection (1) there shall be substituted·

"(1) For the purpose of adjusting amounts payable by way of primary Class 1 contributions, the Secretary of State may at any time make an order altering—

(a) the percentage rate specified as the initial primary percentage in section 4(6A)(a);
(b) the percentage rate specified as the main primary percentage in section 4(6A)(b)."

(7) In subsection (3) of that section, for paragraph (a) (limit on increase of primary Class 1 rates) there shall be substituted—

"(a) to alter the percentage rate of the initial or main primary percentage to a percentage rate more than 0·25 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage in question; or"

(8) In section 134 of that Act (destination of contributions) in paragraphs (a) and (i) of subsection (4) ("appropriate national health service allocation" and "appropriate employment protection allocation", when in force, to include specified percentage of earnings in respect of which primary Class 1 contributions were paid) after the word "paid" there shall be inserted the words "at the main primary percentage rate".
(9) In Schedule 20 of that Act (glossary of expressions) there shall be inserted at the appropriate places—

"Initial primary percentage";
See section 4(6) and (6A)


"main primary percentage"; "primary percentage"
Construe "initial primary percentage rate" and "main primary percentage rate" as references to the percentage rates from time to time specified in section 4(6A)(a) or (b) as the initial or, as the case may be, main primary percentage."


"Main primary percentage"
See "initial primary percentage"; "main primary percentage"; "primary percentage" above."


"Primary percentage"
See "initial primary percentage"; "main primary percentage"; "primary percentage" above."—[Mr. Moore.]

Brought up, and read the First time.

The Secretary of State for Social Security (Mr. John Moore): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to consider Government amendments Nos. 7 and 10.

Mr. Moore: The purpose of the clause is to reform the structure of employees class 1 national insurance contributions, to reduce those contributions for almost all employees and to abolish the steps in contribution rates between the lower and upper earnings limits. These changes were announced by the Chancellor in his Budget statement on 14 March 1989 and build on the reforms enacted in 1985 when the reduced national insurance contribution rates of 5 per cent. and 7 per cent. for lower paid workers were introduced.
The 1985 reforms were a welcome change for the lower paid, but there was a major difficulty. When a person's earnings crossed the lower earnings limit for national insurance, he had to pay a 5 per cent. contribution on all his earnings. An individual earning £42 a week in 1989–90 would pay no contributions. A pay increase of £1 will take

his weekly earnings over the lower earnings limit of £43 a week and he will then pay a contribution of 5 per cent. on all his earnings—£2·15 a week—which is considerably more than his increase in earnings. There are similar effects when earnings rise above £75 and £115 a week—the earnings levels at which the higher 7 per cent. and 9 per cent. rates come into force. Not surprisingly, people are deterred from increasing their earnings to take them over these cliff edges.
People keeping their earnings below the lower earnings limit can be excluded from a wide range of national insurance benefits. Under the reformed system, which comes into effect in October, people earning less than the lower earnings limit—£43 a week for 1989–90—will still pay no contributions. Individuals earning more than £43 a week will pay contributions at 2 per cent.—the initial percentage rate—on the first £43 of weekly earnings and at 9 per cent.—the main percentage rate—on earnings above £43 a week up to the upper earnings limit of £325. At the current lower earnings limit, the national insurance entry fee is just 86p a week. Individuals earning at this level throughout the year will earn entitlement to all national insurance benefits for this small weekly sum.
The single 9 per cent. rate of earnings above the lower earnings limit will remove the steps in contributions that occur on changing from 5 per cent. to 7 per cent. and from 7 per cent. to 9 per cent. A pay increase of just £1 above the £75 and £115 earnings limit means that people will no longer be worse off overall by over £1 a week through higher contributions. The clause will entirely remove the disincentives for individuals to increase their weekly earnings above those earnings limits.
The change will lead to lower contributions generally. From October, 15 million people earning more than £115 a week will pay £3 a week less in national insurance contributions. The 4 million people earning less than £115 a week will not gain as much, but they have already gained from the 1985 reforms, and the combined effect of those reforms and those proposals will result in a gain of £3 a week. They will also benefit from the removal of the cliff edges at £75 and £115 a week, which may have kept down their net earnings. The new system will cost, in terms of lower national insurance contributions, about £1 billion in 1989–90 and about £2·8 billion in 1990–91, which will be its full first year of operation.
The clause removes the steps in national insurance contributions, which were disincentives for employees to increase their hours of work. It reduces the class 1 contributions for almost all employees by up to £3 a week. It provides entitlement to all contributory benefits, including the basic retirement pension, for as little as 86p a week.
I am sure that the measure will be widely welcomed and I commend the clause and associated amendments to the House.

Mr. Frank Field: I should like to continue a conversation that I had during an earlier Question Time with Ministers on the Treasury Bench. I made a plea that the Government should not rest on their laurels and leave their reform of national insurance at this stage. I was concerned specifically with the growth of part-time work and with the fact that 40 per cent. of all part-time jobs in the EEC are in this country. In reply, the Secretary of State said that the reason was probably that large numbers of workers wanted part-time jobs.
I accept that many people want to work part time, and they should have the opportunity to do so. However, at that time I was making a separate point. If employers' contributions are exempted up to the lower ceiling, as it now is, there is an incentive for them to pay people below that level—in other words, to create part-time jobs—whereas, if there were no rigging of the market by national insurance contributions, they might create full-time jobs. I should like the Government to consider that aspect.
I should like to underline a point made by the Secretary of State. For the small sum of 86p a week, people at that end of the market get a very good deal.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 10

BENEFITS FOR WOMEN WIDOWED BEFORE 11TH APRIL 1988

`(1) In the case of a widow whose late husband died before 11th April 1988 and who either—

(a) was over the age of 40 but under the age of 55 at the time of her husband's death, or
(b) is over the age of 40 but under the age of 55 at the time when she ceases to be entitled to a widowed mother's allowance,

section 26 of the principal Act (widow's pension) shall have effect, and be taken always to have had effect, as if section 36(3) of the 1986 1986 (which substituted "45" for "40", and "55" for "50", in subsections (1) and (2)) had never been enacted.
(2) The Social Security (Widow's Benefit and Retirement Pensions) Amendment Regulations 1987 shall have effect, and be taken always to have had effect, with the addition at the end of regulation 3 (transitional provision for widowed mother's allowance where husband died before 11th April 1988) of the following—
(3) In determining whether a widow—

(a) whose late husband died on or after 7th October 1987 and before 11th April 1988, and
(b) who became entitled to a widow's allowance on his death,

is also entitled, after the cessation of that allowance, to a widowed mother's allowance for any period beginning on or after 11th April 1988, regulation 16(1) of the principal Regulations shall apply as if regulation 2(6) above had not been made.
(4) In determining whether a widow—

(a) whose late husband died before 11th April 1988,
(b) who immediately before that date was entitled to a widowed mother's allowance otherwise than by virtue of regulation 16(1) of the principal Regulations, and
(c) who would, apart from this paragraph, cease to be entitled to that allowance on or after that date, is entitled to such an allowance for any period beginning on or after that date, that regulation shall apply as if regulation 2(6) above had not been made."

(3) The Social Benefit (Dependency) Amendment Regulations 1989 shall have effect, and be taken always to have had effect, with the insertion after regulation 3 (which made amendments concerning widowed mother's allowance to regulation 4B of the Social Security Benefit (Dependency) Regulations 1977) of the following—
3A. The first amendment made by regulation 3 above shall not have effect in relation to a widow whose late husband died before 11th April 1988.".
(4) in any case where—

(a) a claim for a widow's pension or a widowed mother's allowance is made, or treated as made, before the passing of this Act, and
(b) the Secretary of State has made a payment to or for the claimant on the ground that if the claim had been received immediately after its passing she would have been entitled to that pension or allowance, or entitled to it at a higher rate, for the period in respect of which the payment is made,

the payment so made shall be treated as a payment of that pension or allowance; and, if and to the extent that an award of the pension or allowace, or an award at a higher rate, is made for the period in respect of which the payment was made, the payment shall be treated as made in accordance with that award.

(5) Where, apart from section 165A of the principal Act (making of claim a condition of entitlement), a widow falling within subsection (1) above would be entitled to a widow's pension for any period beginning on or after 11th April 1988, then, notwithstanding anything in that section, she shall be entitled to that pension for that period if she has made a claim for it before the end of the period of twelve months beginning with the passing of this Act.
(6) Where a widow's late husband died on or after 7th October 1987 and before 11th April 1988 and, apart from section 165A of the principal Act, she would have become entitled to a widow's allowance on his death, then if either—

(a) she was over the age of 40 but under the age of 55 at the time of his death, or
(b) she would, apart from that section, have been entitled to a widowed mother's allowance on the cessation of her entitlement to the widow's allowance,

she shall, notwithstanding anything in that section, be entitled to the widow's allowance (and, accordingly, in a case falling within paragraph (b) above, to the widowed mother's allowance) if she has made a claim, or is treated as having made a claim, for it before the end of the period of twelve months beginning with the passing of this Act.
(7) Where in consequence of any of the amending provisions an adjudicating authority has decided before the passing of this Act that a widow whose husband died before 11th April 1988 either—

(a) is not entitled to a benefit under section 25 or 26 of the principal Act, or
(b) is entitled to such a benefit at a particular rate, an adjudication officer may review that decision, notwithstanding anything in section 104 of the principal Act.

(8) In any case where—

(a) it is determined on such a review that the widow in question was entitled to a benefit under section 25 or 26 of the principal Act, or was entitled to such a benefit at a higher rate, and
(b) the application for the review was made before the end of the period of twelve months beginning with the passing of this Act,

the decision on the review may take effect on 11th April 1988 or any later date, notwithstanding any provision of any Act or instrument restricting the payment of any benefit or increase of benefit to which a person would otherwise be entitled by reason of a review in respect of any period before the review.
(9) Subsection (4) of section 104 (appeals from reviews) shall apply in relation to a review under this section as it applies in relation to a review under that section.
(10) In this section—
adjudicating authority" means—

(a) an adjudication officer;
(b) a social security appeal tribunal;
(c) a Commissioner; and

the amending provisions" are—

(a) section 36(3) of the 1986 Act; and
(b) regulation 2(6) of the Social Security (Widow's Benefit and Retirement Pensions) Amendment Regulations 1987 (deemed entitlement to child allowance for purposes of widowed mother's allowance etc).

(11) The amendment by this section of provisions contained in regulations shall not be taken to have prejudiced any power to make further regulations revoking or amending those provisions.
(12) Nothing in this section shall be taken to prejudice section 16 or 17 of the Interpretation Act 1978 (effect of repeals, substitutions etc).'.—[Mr. Moore.]

Brought up, and read the First time.

Mr. Moore: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to take Government amendments Nos. 55 and 52 to 54.

Mr. Moore: The new clause extends entitlement to widows' benefit under the pre-reforms legislation to all women widowed before 11 April 1988. It will give legislative effect to the commitment that I made to the House on 28 February 1989.
When the reforms were introduced, women whose husbands had died before 11 April 1988 expected to receive widows' benefits based on the rules in force before the reform changes were made. For some widows receiving widows' allowance or widowed mothers' allowance on 11 April the reform changes meant that when their benefit ceased and their succeeding widow's pension entitlement was determined, they received either a reduced rate of pension or no pension at all. There was also a group of mothers whose youngest child was under 19 but no longer a dependant, who would have been entitled to the personal rate of widowed mothers' allowance but lost it under the reform changes. I have decided on the grounds of equity and fairness that all these entitlements should be restored. This means that these widows will regain their right to receive the benefits in line with their expectations on the day that they were widowed.
I want to make clear to the House the arrangements by which we are making payments to these widows. My Department has identified and contacted them and in many cases payments have already been made. Payments in those cases which are not covered by the commissioner's decision of 28 February—the majority—are being made on an ex gratia basis. Whilst it is right that this money should reach these widows as quickly as possible, it is not right to make ex gratia payments in the long term. Therefore, this clause includes the power to put these payments retrospectively on a statutory basis. It will also ensure, as the hon. Member for Derby, South (Mrs. Beckett) understands, that all widows receiving these payments will have access to all the adjudication rights associated with statutory benefits. These payments will, of course, be offset against any other maintenance or income-related benefit that may be or have been in payment.
These changes are expected to affect beneficially 20,000 women at an estimated net cost to public funds of around £5 million in a full year.
Any widow who thinks that she may be affected by these changes and has not been contacted should approach her local social security office.
I commend this clause and the associated amendments to the House.

Mrs. Margaret Beckett: As the Secretary of State is aware, there is a 12-month period during which people can claim. Some people in receipt of widowed mothers' allowance have children who may not have reached the age of 16, so the change in their benefit may not come into question until after that period. Am I right in thinking that the right hon. Gentleman is completely confident that all those people will be picked up by his Department during the ensuing year and that there is no risk that they will not receive the benefit that is due to them?

Mr. Moore: I am grateful to the hon. Lady. Like her colleagues, she has welcomed the new clause on another occasion.
There will be no need to contact the women who are now in receipt of WMA when it converts—the date on which that happens will depend on the circumstances—to the widows' pension. That will automatically be picked up, so I can reassure the hon. Lady on that important point.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 8

ABOLITION OF EARNINGS RULE ETC.

'(1) In section 30 of the principal Act, subsection (1) (the earnings rule) shall cease to have effect.
(2) In section 28(1)(a) of that Act (conditions of entitlement to Category A retirement pension) the words "and has retired from regular employment" shall cease to have effect.
(3) In section 29 of that Act (woman's Category B retirement pension)—

(a) in subsections (2) and (3) (first and second cases of entitlement) in paragraph (a), for the words "both of them have retired from regular employment" there shall be substituted the words "has become entitled to a Category A retirement pension"; and
(b) in subsection (5), paragraph (a) (retirement, in fourth such case, to have retired from regular employment) shall cease to have effect.

(4) For section 12 of the Pensions Act (deferred retirement) there shall be substituted the following—

"Increase of retirement pension where entitlement is deferred
12.—(1) Where a person's entitlement to a Category A or Category B retirement pension is deferred, Schedule 1 to this Act shall have effect for increasing the rate of his pension.
(2) For the purposes of this Act and the principal Act, a person's entitlement to a Category A or Category B retirement pension is "deferred" if and so long as he does not become entitled to that pension by reason only—

(a) that he has not satisfied the conditions of section 165A of the principal Act (requirement to claim); or
(b) that, in the case of a woman's Category B retirement pension by virtue of her husband's contributions, her husband has not satisfied those conditions with respect to his Category A retirement pension;

and, in relation to any such pension, "period of deferment" shall be construed accordingly.
(5) Subsection (1) above affects the rate of pension to which a person is entitled for the week in which that subsection somes into force as well as any subsequent week ("week" having the same meaning in this subsection as it had in the proviso to the said section 30(1) immediately before its repeal).
(6) The enactments mentioned in Schedule (Abolition of earnings rule etc.) to this Act shall have effect with the amendments there specified.'.—[Mr. Moore.]

Brought up, and read the First time.

Mr. Moore: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take Government amendments Nos. 36 to 41.

Mr. Moore: The purpose of the new clause is to abolish the earnings rule for state retirement pension from 1 October 1989. There are one or two administrative points that might be of interest beyond the House. The new clause will give legislative effect to the important decision taken by my right hon. Friend the Chancellor and me and announced in the Chancellor's Budget statement on 14 March. It will also remove the condition that individuals


must be "retired from regular employment". The clause therefore removes all the restrictions which prevent people enjoying their pension while continuing to contribute to the economy and to their own incomes through earnings.
At the moment, someone approaching pension age has to decide whether to retire from regular employment and claim his state retirement pension, or to defer retirement and get annual increments to his eventual pension of about 7·5 per cent. for the first five years after pension age. If he decides to claim his state retirement pension but continues working, his pension is reduced at the rate of 50p on every £1 earned between £75 and £79 a week, and at pound for pound for earnings over £79 a week. This means that someone who earns over £120 a week has his basic state retirement pension completely extinguished. The proposed changes are therefore wholly beneficial.

Dame Elaine Kellett-Bowman: Will my right hon. Friend pay tribute to the late Sir Brandon Rhys Williams, who campaigned on this point for many years?

Mr. Moore: I am grateful to my hon. Friend. That suggestion will be welcomed by hon. Members on both sides of the House. I unreservedly give that commendation to our late colleague who can be regarded as having been in the forefront of many of these issues.
Individuals over pension age will be able to carry on working without having their basic state retirement pension reduced. They will no longer be barred from receiving a full state retirement pension if they work more than a few hours.

Mr. Timothy Raison: Will my right hon. Friend confirm that this welcome measure is in no sense selective or targeted? It applies indiscriminately to all beneficiaries and retirement pensioners regardless of their income.

Mr. Moore: I have the distinct feeling that my right hon. Friend is leaping to get into the next series of debates. He is, of course, right on that point. He might be regarded as somewhat wrong—I do not want to pursue this point at large—in that there is a specific problem with regard to retirement which suggests that it covers, by definition, only a limited class of people.
We are retaining provision for people to defer drawing state retirement pension for up to five years, if they so wish. Increments will continue to be added during periods of deferral at the rate of about 7·5 per cent. per year of deferment, with a maximum increment to state retirement pension of 37·5 per cent. for five years deferral. In future this period of deferral will be known as "period of enhancement". This will allow people the option of building up a higher weekly pension for themselves for when they might need it later in life. Individuals who do that will be able to claim, as now, sickness benefit and unemployment benefit. Similarly, invalidity pensioners, as at present, will keep the current option of retaining invalidity benefit during the five years after retirement age, instead of claiming state retirement pension. Reduced earnings allowance will be available to those over pension age for as long as they are as now in regular employment.
4.30 pm
A large number of our elderly citizens stand to gain from these changes: there are 2,500 individuals who currently have their state retirement pension reduced by the earnings rule. Those individuals will be able to earn as

much as they wish as well as receiving their state retirement pension. There are many more elderly people—about 200,000—who are currently deferring receipt of their state retirement pension. We believe that most of them are likely to have declined taking their pension as a result of the earnings rule. There are also a huge number of pensioners who are not earning at present and there are about 200,000 earning less than £75 a week. For them, the abolition of the earnings rule will be a considerable incentive to start earning, and to earn more.
Letting pensioners know about these changes and getting their pensions to them will be a major undertaking. In advance of receiving Royal Assent, to ensure that all individuals coming up to pension age are fully aware of other changes, a note is now being included in the pension pack setting out these changes and making clear, of course, that they are subject to parliamentary approval. We plan to write to those people who appear to be deferring claiming their state retirement pension because of the earnings rule. Claim forms will be issued to them from 30 May. Individuals whose basic state retirement pension is currently reduced on account of earnings and whose order books span 1 October will have payments of pension included at the full rate from 1 October. My Department's central offices at Newcastle and North Fylde, as well as all 500 of our local offices, will be involved in processing the claims. I am pleased to say that, despite the size of the task, we are able to give effect to the change from 1 October.

Mr. Tony Favell: Has my right hon. Friend shared my experience that groups who help elderly people warmly approve the proposals? I have been approached by many elderly people who say how pleased they are about the changes. Has my right hon. Friend shared that experience?

Mr. Moore: Of course I have. My only regret is that we could not have made the change earlier. It has been welcomed by hon. Members of all parties.
Payments will be backdated to 1 October. Our aim is to pay as many individuals as possible by Christmas and the remainder by the end of the financial year.
The expected benefit cost of the measures to public expenditure is £190 million in 1989–90 and £375 million in 1990–91. The Government believe that this new system will provide more choice and flexibility for older people who want to carry on working. It will remove the penalty which has been an important disincentive to elderly people continuing to contribute to society their particular skills and experiences. I commend the clause and the associated amendments to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Schedule

`ABOLITION OF EARNINGS RULE ETC.

Category A and Category B retirement pensions
1. In section 27 of the principal Act, subsections (3), (4) and (5) (retirement from regular employment) shall cease to have effect.
2.—(1) In section 30 of that Act, in subsection (3) (election to be treated as if entitlement to retirement pension had commenced) the following shall cease to have effect—

(a) in paragraph (a) the words "retired from regular employment or has otherwise"; and
(b) the words "retired or".

(2) For subsection (5) of that section (advance notice of retirement) there shall be substituted the following—


(5) In any case where—

(a) a person claims a Category A or Category B retirement pension, and
(b) the date specified in the claim as the date on which entitlement to the pension is to commence falls after the date when the claim was made,

such a pension may be awarded as from the date so specified but, if so awarded, shall be conditional on the person's not ceasing to be entitled to the pension in consequence of any election under subsection (3) above.
(3) Subsection (6)(a) of that section (power to vary 5 year period in sections 27(5) and 30(1)) shall cease to have effect.

Deferred entitlement to retirement pension
3.—(1) In Schedule 1 to the Pensions Act (deferred retirement) for the words from the beginning of the Schedule to "age" in paragraph 1 there shall be substituted—

SCHEDULE I

INCREASE OF PENSION WHERE ENTITLEMENT IS DEFERRED

Increase of pension where pensioner's entitlement is deferred
1. Where a person's entitlement to a Category A or Category B retirement pension is deferred,".
(2) In paragraph 2 of that Schedule, in sub-paragraph (1), for the words "period of deferment" there shall be substituted the words "period of enhancement".
(3) For sub-paragraph (2) of that paragraph (definitions) there shall be substituted—
(2) In this Schedule—
`incremental period' means any period of six days which are treated by regulations as days of increment for the purposes of this Schedule in relation to the person and the pension in question; and
'the period of enhancement', in relation to that person and that pension, means the period which—

(a) begins on the same day as the period of deferment in question; and
(b) ends on the same day as that period or, if earlier, on the day before the fifth anniversary of the beginning of that period."

(4) In sub-paragraph (3) of that paragraph, for the words "if he had retired on attaining pensionable age" there shall be substituted the words "if his entitlement had not been deferred".
(5) In sub-paragraph (5) of that paragraph, for the words "period of deferment" in both places where they occur there shall be substituted the words "period of enhancement".
(6) In sub-paragraph (6) of that paragraph, for the words "if he had retired from regular employment" there shall be substituted the words "if his entitlement had not been deferred".
(7) In paragraph 3 of that Schedule—

(a) for the words "period of deferment" there shall be substituted the words "period of enhancement"; and
(b) for the words "if he had retired from regular employment" there shall be substituted the words "if his entitlement to the pension had commenced".

(8) In the heading preceding paragraph 4 of that Schedule, for the words "deferred retirement" there shall be substituted the words "deferred entitlement"; and in that paragraph—

(a) in sub-paragraph (1)(b)(ii) for the words "if he had retired on the date of" there shall be substituted the words "if his period of deferment had ended on the day before," and
(b) in sub-paragraph (2)(c)(ii) for the words "if she had retired on the date of" there shall be substituted the words "if her period of deferment had ended on the day before".

(9) In paragraph 5 of that Schedule (married women) for sub-paragraphs (1) and (2) there shall be substituted—
5.—(1) For the purposes of paragraphs 1 to 3 above in their application to a Category B retirement pension to which a married woman is entitled by virtue of her husband's contributions, a married woman who would have become entitled to such a pension on an earlier day if her husband's entitlement to his Category A retirement pension had not been deferred shall be treated as having (in addition to any other period of

enhancement) a period of enhancement which begins on that earlier day and ends on the same day as her husband's period of enhancement.
(2) The reference in sub-paragraph (1) above to the day on which the woman's husband's period of enhancement ends shall, where the marriage is terminated before that day, be construed as a reference to the day on which the marriage is terminated.
(10) In sub-paragraph (3) of that paragraph—

(a) for the words "if he had retired on attaining pensionable age" there shall be substituted the words "if his entitlement had not been deferred"; and
(b) for the words "if she and her husband had so retired" there shall be substituted the words "if neither her nor her husband's entitlement to a retirement pension had been deferred".

(11) In Schedule 20 to the principal Act (glossary of expressions) there shall be inserted at the appropriate places—


"Deferred" and "period of deferment" (in relation to entitlement to a Category A or Category B retirement pension)
See section 12 of the Pensions Act.


"Period of deferment" (in relation to a Category A or Category B retirement pension)
See "deferred" and "period of deferment" above".

Unemployment and sickness benefit
4.—(1) In section 14 of the principal Act, in subsection (2) (conditions of entitlement for unemployment and sickness benefit) for paragraphs (b) and (c) there shall be substituted—
(b) on that day the person—

(i) is over pensionable age, but not more than five years over that age; and
(ii) would be entitled to a Category A retirement pension (section 28) if his entitlement had not been deferred or if he had not made an election under section 30(3) below; or

(c) on that day the person—

(i) is over pensionable age, but not more than five years over that age; and
(ii) would be entitled to a Category B retirement pension by virtue of the contributions of his deceased spouse, but for any such deferment or election."

(2) In subsection (6) of that section (rate of benefit: disregard of certain increases) the words following paragraph (c) shall cease to have effect.

Invalidity pension
5.—(1) In section 15 of that Act (invalidity pension) in subsection (1)(b)(ii) for the words "and not having retired from regular employment" there shall be substituted the words ",but not more than five years over it,".
(2) For subsection (2) of that section (additional conditions for those over pensionable age) there shall be substituted—
(2) The conditions of this subsection are that on that day—

(a) the person would be entitled to a Category A retirement pension (section 28) if his entitlement had not been deferred or if he had not made an election under section 30(3) below; or
(b) the person would be entitled to a Category B retirement pension by virtue of the contributions of his deceased spouse, but for any such deferment or election."

(3) In subsection (6)(a) of that section (regulations making provision for persons over pensionable age corresponding to section 50A) the words "but have not retired from regular employment" shall cease to have effect.

Category C retirement pension
6. In section 39(1)(b) of that Act (Category C pension for retired women over pensionable age whose husband is entitled to such pension) the words "and has retired from regular employment" shall cease to have effect.

Increases for dependants
7. Section 48(2) and (3) (application of earnings rule in connection with increase of Category A pension in respect of dependants) shall cease to have effect.

Industrial injuries benefit
8.—(1) In section 50A of the principal Act (sickness benefit in respect of industrial injury) in subsection (3)(b) for the words "but has not retired from regular employment" there shall be substituted the words "but who is not for the time being entitled to a Category A or Category B retirement pension.
(2) In section 59B of that Act (retirement allowance etc) in subsection (1)—

(a) in paragraph (b), for the words from the beginning to "from" there shall be substituted the words "gives up";
(b) in paragraph (c), for the words "retired or is deemed to have retired" there shall be substituted the words "gave up such employment"; and
(c) in the words following that paragraph, for the words from "retires" onwards there shall be substituted the words "gives up regular employment and may become entitled to it again only if he returns to regular employment."

(3) In subsection (3) of that section (duration of entitlement) for the words "Unless he makes an election in accordance with regulations under section 30(3) above" there shall be substituted the words "Unless he returns to regular employment".
(4) For subsection (4) of that section there shall be substituted—
(4) If he returns to regular employment, his entitlement to retirement allowance shall cease on the day on which he does so; but he may again become entitled to reduced earnings allowance or, if he again gives up regular employment, retirement allowance.
(5) In subsection (5) of that section (rate of benefit) for paragraph (a) there shall be substituted—
(a) 25 per cent. of the weekly rate at which he was last entitled to reduced earnings allowance; or".
(6) After subsection (6) of that section there shall be inserted—
(7) Regulations may—

(a) make provision with respect to the meaning of "regular employment" for the purposes of this section; and
(b) prescribe circumstances in which, and periods for which, a person is or is not to be regarded for those purposes as having given up, or returned to, such employment.

(8) Regulations under subsection (7) above may, in particular—

(a) provide for a person to be regarded—

(i) as having given up, or as not having returned to, regular employment, notwithstanding that he is or intends to be an earner; or
(ii) as having returned to, or as not having given up, regular employment, notwithstanding that he has or may have one or more days of interruption of employment; and


(b) prescribe circumstances in which a person is or is not to be regarded as having given up, or returned to, regular employment by reference to—

(i) the level of frequency of his earnings during a prescribed period; or
(ii) the number of hours for which he works during a prescribed period calculated in a prescribed manner."

(7) In section 2 of the Social Security Act 1988, for subsection (8) (which provides that no retired person over pensionable age shall be entitled to reduced earnings allowance except under subsection (4) of that section) there shall be substituted—
(8) Subsection (4) above shall, in prescribed circumstances, cease to apply in the case of a person who is engaged in regular employment; and, subject to regulations, any subsequent entitlement of his to reduced earnings allowance or retirement allowance shall be determined as if that subsection had never been enacted.

(8A) In subsection (8) above, "regular employment" has the same meaning as it has in section 59B of the Social Security Act 1975 (retirement allowance) and regulations may prescribe circumstances in which a person is or is not to be regarded as engaged in such employment."(8) Subsection (9) of that section (definitions relating to retirement) shall cease to have effect.

Category B retirement pension for widower
9.—(1) In section 8 of the Pensions Act, in subsection (1) (conditions of entitlement for widower's Category B pension) the words "who has retired from regular employment" shall cease to have effect.
(2) For subsection (3) of that section (period of entitlement) there shall be substituted—
(3) Subject to the provisions of the principal Act, a man shall become entitled to a Category B retirement pension on the day on which the conditions of entitlement become satisfied in his case and his entitlement shall continue throughout his life.

Invalidity pensions for widows and widowers
10.—(1) In section 15 of that Act, in subsection (5) (disentitlement to widow's invalidity pension)—

(a) for the words "and has retired from regular employment" there shall be substituted the words "and is entitled to a Category A or Category B retirement pension"; and
(b) for the words "she retires from regular employment, having attained" there shall be substituted the words "she has attained".

(2) In section 16 of that Act, in subsection (5) (disentitlement to widower's invalidity pension)—

(a) for the words "and has retired from regular employment" there shall be substituted the words "and is entitled to a Category A or Category B retirement pension"; and
(b) for the words "he retires from regular employment, having attained" there shall be substituted the words "he has attained".

Occupational and personal pensions
11. In section 29 of that Act (contracted-out rates of benefit) in subsection (2) (circumstances in which a person is treated as entitled to a guaranteed minimum pension) before the word "if" in each of the places where it occurs there shall be inserted respectively "(a)", "(b)" and "(c)"; and at the end of that subsection there shall be inserted the words "or
(d) if its commencement had not been postponed, as mentioned in section 33(3) below.".'.—[Mr. Moore.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

UPRATING OF CHILD BENEFIT

`In section 63(3) of the 1986 Act, at the end there shall be added the following paragraph—
`(c) mentioned in subsection (1)(f) above:.—[Mrs. Beckett.]

Brought up, and read the First time.

Mr. Robin Cook: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to take new clause 2—Social Security Act 1986—
`In section 63(3) of the Social Security Act 1986 for "(c) or (d) above" there shall be substituted "(c), (d) or, in any Order having effect on or after 1st April 1990, (f), (child benefit), above".'

Mr. Cook: I want to follow the hon. Member for Lancaster (Dame E. Kellett-Bowman), who referred to the late Sir Brandon Rhys Williams. I assure the hon. Lady that the absence of—

Mr. Deputy Speaker: Order. It has been pointed out that the hon. Gentleman's name is not on the new clause. Will an hon. Member whose name is on it move it formally?

Mrs. Beckett: I beg to move, That the clause be read a Second time.

Mr. Cook: I am happy to assure the House that I agree with the words of my hon. Friend.
I was paying tribute to the memory of Sir Brandon Rhys Williams, whose absence from these debates is much regretted by Opposition and Conservative Members, not simply by Conservative Members. There would be no more fitting tribute to the memory of the late Sir Brandon Rhys Williams than for the House to pass new clause 1 or new clause 2. Sir Brandon was indefatigable in his defence of child benefit and in his campaigns to secure regular and honest upratings of that benefit.
This is not the first occasion on which the House has had the opportunity to debate the freezing of child benefit. We did so most recently in January, on a Supply day motion tabled by the Opposition. On that occasion, a number of Conservative Members were good enough to say that they agreed with us on the issue, but could not vote for the motion because it was a Labour motion. I must confess that I am not entirely persuaded that that in itself is a good enough reason for not supporting a motion with which one agrees. However, that difficulty is now removed because those hon. Members have tabled their own new clause. It may be helpful to them—and make the evening more interesting for the Whips—if the vote at the end of the debate is on new clause 2 rather than on new clause 1. It may be for the convenience of the House for me to say now that we do not propose to press new clause 1 to a vote. I hope that that will also assist in keeping those on the Treasury Bench rather more on the edge of their seats than they might otherwise have been.
The regularity with which this issue has been debated must have at least the one essential function of convincing those on the Treasury Bench that the issue will not go away, but will return to harass them repeatedly until they accept the logic of the case or dispose more satisfactorily of it than they have in our previous debates on child benefit. Every year, the Secretary of State reviews whether child benefit should be uprated. We are assured that it is mere coincidence that in both years in which the present Secretary of State has carried out the review he has decided that it is appropriate to freeze child benefit. He dare not state that child benefit should be frozen as a general principle because he would be in breach of the law that obliges him to review annually the level of child benefit. That leaves him in a rather uncomfortable position. He is unable to attack the benefit openly and to state that he would wish it to wither away. But, because he cannot openly attack the benefit, he has some difficulty in justifying why he never thinks it right to uprate child benefit. His difficulty tonight is compounded because new clause 2 in particular clearly focuses not on what should happen this year, but on what should happen next year. If the Secretary of State invites us to reject new clause 2, he is inviting the House to leave open the possibility that next year he may choose again to freeze child benefit for the third successive year.
In so far as the Secretary of State has come near to justifying such a freeze in our previous debates, he has

done so on the basis that it is cheaper to control access to child support through the means test, hence the stress placed on family credit as a substitute for child benefit. With every successive debate, it is possible to evaluate more clearly whether family credit can be portrayed as a satisfactory and credible alternative to child benefit. We have continuing evidence that the number receiving family credit is far smaller than promised. The Government's initial estimate of those likely to claim family credit was 470,000. The Secretary of State will be aware that the number has never exceeded 255,000, and at the end of February the number was slightly lower than the November peak. The number of people on family credit has flattened out at half the level initially promised by Ministers when family credit was introduced in the House.
The Department of Social Security has made two responses to the rather meagre take-up. The first response —which is welcome—was the relaunch of family credit a fortnight ago, on which the Secretary of State is spending £7 million. We wish the relaunch well and hope that it will be successful. However, I hope that he will forgive us for pointing out that family credit is becoming one of the most advertised benefits. Even if the right hon. Gentleman's wildest hopes are fulfilled and the relaunch succeeds by driving up take-up by, for example, one third, it will mean that the Department is spending £100 for every new claimant for family credit. That is a large administrative overhead and I am bound to say that it contrasts badly with the administrative overheads for child benefit.
Nobody suggests that child benefit needs a relaunch. No one is proposing a £7 million recruitment campaign to recruit claimants for child benefit. On the contrary, for minimal effort, child benefit obtains a 98 per cent. take-up. That figure turns not on packaging and advertising but on the nature of the benefit. Child benefit scores high because it is well known, easily understood and simple to claim and because it is universal so there is no sense of social stigma attached to claiming it. For all those reasons, the take-up of child benefit will always be far higher than anything that can be achieved by any means-tested benefit.
The other response from Ministers to the low take-up of family credit was less elevated. Confronted with a problem, the Government changed the figures, as they so frequently do. The new figures produced by the Secretary of State a month ago knock a quarter of a million off the estimate of those eligible for family credit. That has the convenient consequence that it has increased the percentage take-up of family credit without its being necessary for one extra person to claim it. Overnight, the take-up figure has soared from 35 to 50 per cent.
The Secretary of State will recall that he announced those figures on 17 March. On 6 April, I asked whether he would deposit in the Library the working papers on which the revised figures were based. Last Monday, he told the House that the figures had been deposited in the Library. When I checked, I found that the papers had not yet been deposited. I pursued the matter and asked the right hon. Gentleman's office whether we could have the papers. I was told that arrangements would be made for a package to be sent to my office. When I opened the package, I discovered that it contained the market research carried out for the relaunch. It is singularly apt that, when we ask for the Government's statistical data, we are sent market research.
On Friday, I again asked where the working papers were. I was told that they had not been deposited in the


Library because they were not yet ready. These are the working papers on which a conclusion was apparently reached by the Secretary of State a month ago.
On my way to the Chamber today, I checked in the Library and discovered that three sheets dealing with the take-up of family credit had been deposited by the Department of Social Security this very afternoon. The Secretary of State will appreciate that I have not yet had time to go through the complex formulae. Of the three sheets, two deal with methodology and none provides the raw data. If the Secretary of State had those sheets in front of him when he announced the revised figures, he will know that the foundations for those revised figures look very shaky indeed.

Mr. Favell: Is the Labour party in favour of abolishing family credit and spreading benefit thinly among everyone entitled to child benefit? If so, surely the poor will suffer.

Mr. Cook: We are most certainly not in favour of abolishing family credit. We are most anxious that all the 470,000 who we were promised would get family credit should get it, for the good and simple reason that, as the hon. Gentleman would recall if he had attended the debates in 1985 and 1986, Ministers repeatedly promised that family credit would compensate families with children for cuts in housing benefit and the loss of entitlement to free school meals. Those families have suffered the cuts but a quarter of a million of them are not receiving the family credit which we were promised would provide the compensation. We very much hope that the campaign launched by the Secretary of State will succeed and that he will find the remaining quarter of a million, but in the meantime, given the Government's pathetic failure to match even their own target for the take-up of family credit, they cannot seriously argue that family credit is an adequate substitute for child benefit. After all, the increase in take-up was achieved without a single extra person claiming.
The net result of all this is that, in the past 18 months during which we have been debating the uprating of child benefit, the only thing that has happened to alter the debate one way or the other is that it has become absolutely clear, beyond argument, that family credit cannot possibly be paraded as a substitute for child benefit. Family credit goes to only one quarter of families—one twentieth of those who receive child benefit. Not only does child benefit go to many more families with children; it goes to many more families living in poverty. For a start, it goes to the 250,000 families who, even on the revised figures, are poor enough to qualify for family credit, but do not receive it. Each of those families gets child benefit and it is the only support that they have for their children.

Dame Elaine Kellett-Bowman: The hon. Gentleman referred to those in poverty. Does he have any recent data suggesting that, as we discovered some time ago, there is a remarkable number of women from quite wealthy families whose only income is child benefit? Their husbands pay the bills, the rates, and the butcher but they do not give them any money in their hands. Those women at least get child benefit.

Mr. Cook: The hon. Member for Lancaster (Dame E. Kellett-Bowman) is absolutely right. During our previous

debate I read to the House a moving letter from the wife of a man whose earnings were well above average who said that she depended on child benefit because it was the only income on which her husband could not get his hands. The hon. Lady has led us to the reasons why child benefit is so superior to family credit and why it is so important.
First, child benefit puts money in the hands of the mother. It redistributes purchasing power in favour of children because it goes to the parent who is most likely to be responsible for feeding and clothing the children. Secondly, it puts money in the hands of just about every mother. It has a take-up rate as close to 100 per cent. as one could hope to achieve.
Thirdly, child benefit does not fall as income increases. The Government persist in representing that feature of child benefit as its major weakness. In fact, it is its great strength. Child benefit represents an important ladder out of the poverty trap. It will be impossible for child benefit to fulfil its role as a ladder out of the poverty trap if the Government substitute for it a means-tested benefit confined to those who are already in the poverty trap.
There is a fourth reason why child benefit remains a correct and appropriate way—the best way—of combating poverty among children: it is reliable and consistent. It does not fluctuate with all the other exigencies that can affect families in our society.
The Secretary of State has referred to child benefit as a benefit of the past. That is an odd way to talk about a benefit that was introduced only a decade ago especially as, in one critical respect, child benefit is more relevant than ever. Child benefit provides a guaranteed income. It provides stability in mothers' budgets, in sharp contrast to the dramatic changes in their circumstances that have become commonplace in modern society.
The Government have created what they like to call a flexible labour market. By that they mean that many on the labour market are stuck in a revolving door— bouts of work alternating with bouts of unemployment. Child benefit provides a stable constant support in meeting the expenses connected with children and smooths the transitions that affect those 4 million households who move in and out of employment and part-time employment each year. The expenses incurred in feeding and clothing children do not vary according to whether the head of the household is in or out of work, receiving overtime or in reduced short-time work. That flexible labour market requires an inflexible, constant, reliable child benefit that matches the constant nature of expenses on children.
Let me come to the clearest reason why child benefit should be uprated. Child benefit, logically, might be better regarded not as a cash benefit but as a tax allowance. After all, it replaced a tax allowance. It is the only recognition in the benefits and tax system of the additional cost to the taxpayer who has children. The hon. Member for Lancaster referred to those apparently wealthy and comfortable households in which the father may fail) to turn adequate income over to the mother.
There is another matter in relation to wealthy and comfortable households. Since the Government came to office, they have made it a point of pride annually to uprate tax allowances, frequently well in excess of the rate of inflation. When they do so, no Minister or Conservative Back Bencher complains about increases in such tax allowances on the basis that they apply indiscriminately to wealthy and comfortably off families—indeed, they


provide a marginal advantage which is even greater to wealthier families. I again ask the question that Opposition Members have put on the past three occasions on which the House debated child benefit and to which I have not yet received a reply: how can the Government come to a judgment which, in its order of priorities, decides that the married man's tax allowance should go up by 22 per cent. in real terms—that is what has happened over the past decade—while the value of child benefit has gone down by more than 12 per cent. over the same decade? By what extraordinary feat of mental gymnastics can Ministers persuade themselves that the cost of maintaining a wife has gone up by one fifth and that the cost of maintaining a child has gone down by one eighth? Where are the data to support such an extraordinary double standard? If they exist, could they also be deposited in the Library?
For all those reasons, Ministers are wrong to resist the uprating of child benefit. For all those reasons, I hope that Conservative Members will vote with us tonight, to press on the Government the case for uprating child benefit next April. I appreciate that the difficulty in their joining us in the Lobby is that they are not supposed to do so. They are supposed to support and stand by the party with which they were elected.
There is one obvious reason why Conservative Members should not feel that compunction on this issue. That reason is to be found in the manifesto on which all Conservative Members stood at the last general election. That manifesto contained a pledge that child benefit will continue to be paid as at present. There was no rider in that manifesto that it would continue to be paid as at present at a frozen level. [Interruption.] I heard an hon. Gentleman say that it has continued to be paid as at present. I should be interested to know whether, in his election address to his constituents at the last election, the hon. Gentleman spelt out that the manifesto meant that it would be a frozen child benefit at a single figure of £7·25. If the hon. Gentleman did state such a clear footnote in his election address, I assure him that I shall exculpate him from any need to vote with the Opposition tonight for the uprating of child benefit.
For all other Conservative Members who may not have put any such saving clause into their election addresses, any honest, simple and candid reading of their manifesto means that they should vote with us tonight and, next year, provide for an honest uprating of the benefit that goes to 7 million mothers and 12 million children.

Mr. Raison: The hon. Member for Livingston (Mr. Cook) spoke trenchantly about new clause 1. I wish to speak about new clause 2, which would automatically index-link child benefit in the same way in which retirement and other benefits are automatically uprated each year. It will not apply in the current financial year. We accept that we are now too far into the new financial year for that to be possible. Nor does it make up for past failures to uprate child benefit—for the fact that child benefit has lost 12 per cent. of its value since it was introduced in 1979. As the hon. Gentleman said, that is in sharp contrast with income tax allowances which went up during that period.
We simply ask that, in future, the money that is already in the public expenditure projections for the uprating of

child benefit should be used for that purpose. This year, the cost of uprating is estimated to be about £200 million. I repeat that it was allowed for in the present public expenditure projections, and it is allowed for in the public expenditure projections for next year. We do not even ask for new, additional money from the Government.
My right hon. and hon. Friends and I have tried to put new clause 2 in terms which are as easy as possible for the Government. As I said, we are not insisting on anything this year. We are trying to establish the principle which was inherent in our manifesto commitment that there should be a regular uprating of child benefit, and that we will achieve the statutory status for it. I hope that my right hon. Friend the Secretary of State will accept our new clause. My right hon. and hon. Friends and I intend to vote for it.
Why do we feel so strongly about this matter? The hon. Member for Livingston was right to say that we should regard child benefit as a tax allowance rather than a benefit. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) has often made that point. There is no doubt that child benefit has descended from the historical tradition of tax relief for those with children. That tradition dates back to the late 18th century. There was a period during the 19th century when it was dropped, but it has had long standing in our history, and it would be wrong to forget that. In racehorse terms, the origin of child benefit is "by family allowance, out of child tax allowance."
People object that child benefit is not targeted. That is the principal objection that we are likely to hear from hon. Members who support the Government in this matter. However, tax relief on pensions, mortgages, and on married couples' and personal allowances is not targeted. The Government are proposing to introduce tax relief for health insurance for the over-60s. Again, there is no intention of targeting it. My right hon. Friend should state why we should treat child benefit selectively—that is clearly the direction in which we are moving—when many other major sources of support for large sections of our community are not selective or targeted.

Mr. Frank Field: Is not the right hon. Gentleman being unusually generous to the Minister? Those tax allowances are targeted. They are targeted in inverse proportion to people's needs. The richer one is, the higher one's rate of tax, and the more valuable are one's tax allowances.

Mr. Raison: That is true of mortgages and pensions.

Mr. Field: It is true of all of them.

Mr. Raison: Not all. Somebody receiving help with his pension in the form of tax relief gets more if he has a large pension. It seems to fly in the face of all reason that we should restrict child benefit on the basis of income. As I have already elicited from my right hon. Friend, his new and welcome measure on the abolition of the earnings rule is in no sense targeted. It will apply to everybody. Why should the Government pick out this form of help to a significant group in the population—the help which, through child benefit, goes to those with children?
Bearing in mind the lives of our constituents and what is going on in our country today, there is no doubt that the bringing up of children can entail significant costs. Of course, for most people it brings great pleasure and happiness—I do not want to play that down for one


minute—but it also brings great financial burdens. Those burdens fall on those who are just above the level of selective benefits—the not-quite-poor, as some hon. Members have called them. Conservative Members must remember that there are many people in this country whose incomes are just above the level of means-tested benefits, and they do not find life particularly easy financially. It would be a great error to think that such burdens do not hit them. The hon. Member for Livingston forcefully made the point that, to a great extent, the burden of bringing up children—not only the actual work but the financial cost—is borne by mothers and that child benefit is paid to mothers.
Those with a taste for history will recall the battles fought at the end of the war to establish family allowance, in which the great aunt of my hon. Friend the Member for Lewes (Mr. Rathbone) played such a heroic part. Other Conservative ladies such as Mrs. Cazalet Keir were also involved in those battles. They fought to establish the principle that the benefit should go to the person who really needed it—the mother. To forget that would be to fly in the face of a tradition long held within the Conservative party and widely shared by many important women's bodies outside the Conservative party. I understand that the majority of the Women's National Commission has come down in favour of uprating child benefit. The Save the Children Fund, the National Children's Bureau, Barnardo's, the Children's Society, the National Children's Home, family service units, family welfare associations and many others have joined us in the conviction that it is absolutely essential to uprate child benefit.
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We must accept that we are living in what in some ways is a radically changing social climate. There are things in that climate which make bringing up children more difficult than it has been. We are all aware from our constituency surgeries that there has been a rather tragic increase in the proportion of cases where a family breakdown is at the heart of the problem. We are all aware that there has been a substantial growth in the number of one-parent families in this country. Those people particularly need the certainty of child benefit. Today there is more pressure and more need for women to go out to work. That incurs certain costs, and an enlarged child benefit would provide a better way of helping those people than any other form of benefit. The certainty of child benefit is one of its most valuable features. People know that family benefit will come to them. It does not involve the delay that occurs when establishing a claim to selective benefit.
We must ask ourselves a profound question: do we want to see more and more people pushed into some kind of means-tested support? The community charge will be accompanied by a massive system of rebates. I believe that something like 10 million people will receive rebates under the community charge. The policies for rented housing will have the same kind of effect, and the number of people claiming housing benefit will clearly rise.
Obviously no one is against income support or family credit. It is absolutely right that we should recognise that child benefit cannot do the whole job. One would very much hope that if we can allow child benefit to grow in the way that the late Sir Brandon Rhys Williams advocated in his posthumously published pamphlet "Stepping-stones to

Independence", and as the basis for a tax credit scheme, we can get to grips with a very difficult social problem in a way which has not been possible so far.
An advantage of child benefit is that it offers one of the biggest "Stepping-stones to Independence" to which Sir Brandon referred. My right hon. Friend the Secretary of State has often said that he wants to get us away from the dependency culture. I do not believe that scrubbing child benefit will do that. The dependency culture is expressed by the reliance on the means-tested benefits to which I have just referred. We are all aware of the great problems with the take-up of family credit and many of us will have seen the advertisements on television intended to encourage people to collect their family credit.
Another argument that the Government have often put forward is that child benefit does not help the really poor —those on family credit and income support. Perhaps it is true as things stand that if there is an increase in child benefit they will not receive its direct effect. However, as I understand it, there is nothing in the Social Security Act 1986 to prevent those on other benefits from receiving the full increase from child benefit. The fact that they do not receive the full increase is simply a reflection of the orders and regulations with which the Government implement the Social Security Act 1986. They could perfectly well say that we should put up child benefit to allow everyone to gain from it. Meanwhile we have to face the fact that the decision not to uprate child benefit this year has moved some 30,000 families with 60,000 children on to income-related benefits. Is that really the tendency that the Conservative party wants to support?
Some people say that child benefit should be taxed and, of course, that has attractions. Family allowances were taxed in days gone by. However, there is a technical problem today. The absolutely justified separation of a husband and wife's taxes, which will be introduced next year, will make it virtually impossible to tax child benefit. Who would we tax? Would we tax the husband who does not receive the benefit or the wife who receives it but whose income will normally be much lower? The latter policy would not be well received, although in many cases the wife might not reach the level to be liable to pay tax. Similarly, husbands would not be very enthusiastic about being taxed on a benefit which they do not receive. That would certainly be novel.
Another argument is that those paying the higher rate —40 per cent.—should perhaps not receive child benefit. I can see a case for that, but there are practical problems. I cannot help but think back to our debates on the community charge and the amendment in favour of a banded system and the vigour with which the Government claimed that it was completely impractical to have a system by which those on the 40 per cent. rate should pay a higher community charge because very often over 18 months or two years it was difficult to know exactly what level people were on. If that criticism applied for a banded community charge, it would apply with child benefit.
The practical and moral arguments point strongly in favour of continuing child benefit. We are talking about the possibility that the Government may decide between now and the next election to drop child benefit as part of our social security apparatus. That would be a disastrous policy.
We know that child benefit cannot be ended during this Parliament. I remind my right hon. Friend the Secretary of State that in 1985 a very comprehensive review of social


security came down firmly in favour of child benefit. I have a battery of quotes from my right hon. and hon. Friends in favour of child benefit and I will not embarrass them by quoting from them today. All sorts of groups firmly believe that child benefit is right and must be uprated. Those are not loony groups, but include bodies such as the women's institutes.
We know that child benefit can help to restrain inflationary wage pressure. After all, the existence of a large number of children is likely to cause working people to demand higher pay. If some of the burden of higher costs can be borne by child benefit, the pressure will be lessened.
As the hon. Member for Livingston has reminded us, child benefit helps to offset the poverty or employment trap. Above all, child benefit embodies the positive symbol of that active family policy to which the Conservative party is committed. That is a commitment to the job of raising children decently in a world where it is not always very easy to do that. However, that is only part of the job, and many other factors come into play. If we abandon child benefit we will turn our backs on a great tradition. If we keep child benefit but do not uprate it and simply allow it to wither on the vine, that will be almost as bad as abandoning it.
I urge my right hon. Friend the Secretary of State to accept new clause 2. If he cannot do that, I urge right hon. and hon. Members to support it in the Lobby.

Mr. Menzies Campbell: I begin by apologising for the absence of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood). He set out to be here for the proper time, but unhappily has not been able to enlist the co-operation of British Rail. He will join us as soon as he possibly can. Unfortunately, he is delayed on a train somewhere between London and the north.
I am a poor substitute for my hon. Friend the Member for Roxburgh and Berwickshire in that I do not possess his detailed knowledge of the labyrinthine complexities of social security legislation. However, I feel that that may not be such an obstacle this evening. We are concerned more with a matter of principle than of complexity. The arguments for and against have been well rehearsed, but, if I may respectfully say so, it seems to me that those marshalled by the hon. Member for Livingston (Mr. Cook), who opened the debate, were overwhelming in their quality.
It may help if I indicate briefly some of the reasons why I and my hon. Friends will be supporting whichever of the two new clauses is pushed to a vote. In the first place, as has been pointed out, child benefit was introduced to take the place of the old child tax allowances. Secondly, the combination of tax cuts in recent Budgets and the freezing of child benefit has resulted in money being taken from those with children and given to those without children. As has been pointed out, the level of child benefit has fallen by 12 per cent. in real terms since 1979, during which period the married man's tax allowance has increased by 22 per cent., and the single person's by 19 per cent., after taking account of statutory indexing.
Of course, the great majority of families affected by the level of child benefit fall neither into the category of the rich nor into the category of the poor. Indeed, many of

those families will find the effect of a freeze to be very considerable—indeed, disproportionate. In these circumstances, it seems that the arguments in favour of uprating child benefit are overwhelming, not least because the permanence of the benefit, and the ease of access to it, undoubtedly help poorer families, many of whom have great problems, in the management of their finances. These people may be subject to great fluctuation in income and in circumstances, week by week.
It is easy to argue that one of the most significant features of child benefit is that it is paid direct to wives. There is a feeling among some of us that we may be intruding on private grief when we hear the debate among Tory Members as to what their manifesto actually said. I suspect that the capacity of the textual analyst really ought not to concern this debate. This is a debate about principle, and not about what was said, or is understood to have been said, in the Government's manifesto. There is little doubt that the vast majority of people in this country understood that the Government's proposals necessarily involved the uprating of child benefit year on year. It is for that reason, and because of the merits of the case for uprating, that my hon. Friends and I will certainly support whichever of the two new clauses is put to the vote.

Mr. John Maples: The debate on this subject has become something of an annual event, and some Members seem to make very much the same speech year after year. I am afraid that my speech will be no exception.
As the debate goes on, in its wider context, it is clear that my side of the argument is winning. While that may not be apparent in the present attendance in the House —I do not think that I have ever felt quite so outnumbered on my own Benches—outside the House, in the wider debate in the country among people who think about tax and social security policy, the Government are winning. Essentially, it boils down to an argument about means-tested benefit versus universal benefit.
Opening the debate, the hon. Member for Livingston (Mr. Cook) made an eloquent plea for universal benefits. One knows that that is part of Socialist policy, and has been for a very long time. Of course, the other side of that case, about which the hon. Gentleman did not tell us, is that universal benefits mean higher rates of taxation. On the whole, I am in favour of lower taxation and means-tested benefits, and of paying the price of the kind of poverty trap that one ends up with, rather than of having high rates of taxation and universal benefits. I do not believe that it is the business of the Government to try to help people who are in a position to help themselves, but I do believe that it is the Government's job to help those who are not in a position to help themselves.

Mr. Tony Marlow: In which case, could my hon. Friend tell the House whether he is or is not in favour of the old system of child tax allowance, because that allowed people to keep more of their own income?

Mr. Maples: My hon. Friend has intervened very early in my speech. I was going to come to the question of tax allowances, but, as he has raised it, I shall deal with it now. Paradoxically, if we had kept the system of child tax allowances, of which my hon. Friend is apparently in favour, their value would have fallen by one third since 1979. The reason is that taxes have been reduced from 35


to 25 per cent. The attraction of child tax allowances under the last Labour Government was based on the fact that the rates of income tax then were so high. If we had perpetuated that system, the value of those tax allowances would have fallen by about £90 in today's money.

Mr. Jim Lester: Adopting the logic of my hon. Friend's argument against universal benefits and in favour of targeted, means-tested, benefits, how does he explain tax benefits for pensions, tax benefits in respect of married women's earned income, and the various untargeted global benefits that are paid freely to people with mortgages? By the logic of my hon. Friend's argument, those should also be withdrawn. According to what he says, we should means test those people directly and, thereby, reduce tax a great deal more.

Mr. Maples: There is a good deal in what my hon. Friend says. It is an attractive argument. Indeed, in the past, I have argued that we should try to reduce rates and remove allowances and deductions. But there is a fundamental difference between not paying tax and receiving social security benefits, and anybody who does not realise that is missing a terribly important point in the debate. I do not believe that it is the job of the state to take money from people in tax and give it back to them in social security benefits.

Mr. Frank Field: Will the hon. Gentleman give way?

Mr. Maples: I wonder if I may be allowed to get a little further into my argument. I have dealt only with the first heading in my notes.
I was surprised that my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) should intervene to suggest that it was part of Conservative policy to regulate financial affairs between husbands and wives. That has certainly never been part of my notion of Conservative policy. In fact, I do not think that it is any business of the state either. I do not think that it is the business of the state to take money from working husbands and give it back to their wives.

Mrs. Beckett: Will the hon. Gentleman give way?

Mr. Maples: Perhaps the hon. Lady will allow me to finish this point.
In any case, there are two intervening transactions. The first concerns the cost of collecting the tax, which is generally 2 to 2·5 per cent. The other concerns the cost of administering child benefit. I do not know what its level is, but it is probably 1 or 2 per cent. In other words, probably between 4 per cent. and 5 per cent. is lost in the process of taking money out of the pockets of husbands and giving it back to their wives. I cannot see that that is part of Conservative philosophy or that it is any business of the state.

Mrs. Beckett: I am following the hon. Gentleman's argument with interest. As I understand him, he is saying that the state should not take a view as to how income is shared, distributed and used within the family. Am I right, however, in thinking that he voted for non-dependant deduction in the case of housing benefit, which takes money from the family on the basis of a contribution of teenage children to housing costs?

Mr. Maples: I certainly did. There is a very powerful argument for that. If a teenager earns £70 a week, to assume that he is making no contribution to the family's rent is simply flying in the face of reality. He almost certainly is making such a contribution. But this is something totally different: taking money from the husband in tax and giving it back to his wife. As I see it, that is no business of the state.
Another general point that I think is missed here is that we are spending £4·5 billion of public money on the administration of this benefit—taking it in taxation, and giving it back to wives in the form of child benefit. The cost of administration and collection in the middle has to be borne. That is unfair, because very often it conies from people who do not have children and whose income is low, and goes to people who do have children and whose income is high. Increases do not benefit those on the lowest incomes. I believe—and this is perhaps a fundamental point—that it does not achieve its main objective.
An increase in child benefit would be of absolutely no help to families on income support or family credit. Family credit now applies a long way up the income scale. At 1988–89 rates, a family with two children under the age of 11 could have received family credit up to an income of £7,500 a year. In 1989–90 the income figure would be more than £8,000 a year. If those two children were 14 and 16, the family could have continued in 1988–89 to receive family credit up to an income level of £9,000 a year, which in 1989–90 money is £9,700. But a family with two children aged 14 and 16, earning below £9,700 a year, would not benefit by one penny piece from an increase in child benefit. That is a fundamental point.
Presumably those are the families whom we regard as needing help. Families trying to bring up children on incomes of £7,000, £8,000 or £9,000 a year certainly need help, and if there were any proposal to remove that help I should certainly vote against it. But what is proposed in the new clauses would be of absolutely no benefit to those families. Every penny they gained in increased child benefit would be lost either in income support or in family credit. It is of no use to people at the low end of the income scale whom we are supposed to be helping.

Mr. Robin Squire: Will my hon. Friend bear in mind that for poorer families and even not-so-poor families, particularly if the wage earner is unemployed or ill, child benefit is relevant? It is not just a case of saying that it cannot benefit them. It can benefit people in those specific circumstances.

Mr. Maples: My hon. Friend knows more about the workings of the social security system than I do, and he may be right. In effect, he is criticising the way family credit operates and if his criticism is valid, perhaps it should operate to provide a more regular stream of income. The non-indexation of child benefit has reduced it from £835 to £725. The £725 continues to be paid, so is a regular income.
I was saying that people on low incomes do not benefit from the increases. There is another side to that which presents paradoxes. It is that everybody else pays more in tax than they receive in child benefit. Anyone with two children who earns £7,100 a year pays income tax of £'751 and receives child benefit of £754—£3 more. If we uprate that to this year's tax rates, the answer might be slightly


different. Anybody with one or two children who earns more than £7,100 pays more income tax than he receives in child benefit.
Is it the business of the state to organise that sort of transfer through the tax and social security system? I do not believe that it is. The way to help those people, if they need help, is through tax reductions. The consistent theme of the Government's tax policy is to reduce the basic rate of tax. That is untargeted and goes to everybody, but those on incomes who can afford to take care of children should do so. Whether or not they have children is a free choice. If their incomes are insufficient, the social security system should make it up. It is not for the tax and social security system to differentiate between people and to decide how they are taxed and how social security is spent when they can make those decisions themselves.
There are one or two other fundamental misunderstandings about child benefit. Forty per cent. of the recipients of child benefit have incomes in excess of £15,000 a year—substantially above the national average. A further paradox is that people on low incomes without children are subsidising people on high incomes with children. Why should a single shop assistant earning £100 a week pay tax to subsidise someone earning £20,000 a year? I cannot see that that is fair in any way.
Another point that is lost sight of is that the world has come a long way since 1979. People's disposable income has risen substantially. We know that the income of someone on average earnings has risen by 29 per cent., but that percentage is not usually translated into pounds per week. Somebody on average earnings is, in today's money, £46 a week better off than 10 years ago. Somebody on three quarters of average earnings is £34 a week better off and someone on half of average earnings is £22 a week better off.

Mr. Marlow: Will my hon. Friend give way?

Mr. Maples: I shall finish this point. Against that we are setting a non-indexation of child benefit of just over £1 a week. People at all levels of earnings—I agree that there is a different set of criteria for people out of work—are considerably better off in terms of take-home pay and disposable income than they were 10 years ago.
When people have such increases in their disposable income the necessity for the state to provide for them is demonstrably diminished. It is right that we should expect people to use part of the increase in their disposable income to pay for items which perhaps 10 or 15 years ago they could not afford and which it was right for the state to help them with. To suggest that there is some moral compulsion on the Government to pay an extra £1·10 a week per child to somebody whose disposable income has risen by £34 a week during the past 10 years is difficult to swallow.
We are taking about increases in disposable incomes at low levels of earnings. In 1988–89 half of average earnings was £130 a week gross. The increase in the disposable element of that is £22 a week, so on earnings well below the family credit ceiling people have had increases of £20 to £30 a week in their disposable income. That sets in a much more realistic context the non-indexation of child benefit which amounts to £1·10 a week. Put in that context the sum is insignificant.

Mr. Marlow: I am grateful to my hon. Friend for his generosity. If I may say so, he is playing games with statistics. He is talking about disposable incomes and he said that 40 per cent. of recipients of child benefit are on incomes of £15,000 a year. Let us look at disposable income. Can my hon. Friend tell the House what the disposable income is, after mortgage payments, of his constituents who are earning between £15,000 and £20,000 a year? He will find that it is not very great.

Mr. Maples: I am reluctant to take issue in such sharp terms with a good and hon. Friend. If he thinks that it is the business of our tax and social security system to funnel taxpayers' money to people earning more than £15,000 a year, I am amazed. Last year average earnings were £13,200 a year, so we are talking about people on 120 per cent. of average earnings. We cannot help people who earn more than the average. It is arithmetically impossible. We cannot take money from everybody and give back more to everybody. All we can do is take money from people earning more than the average and give it to people earning less than the average. Even the hon. Member for Livingston would not go further than to suggest that he could make everybody equal. He certainly could not improve everybody's lot.
The crux of my argument is the need for a means-tested system which is generous and operates reasonably and sensibly to help people who cannot afford to bring up children on their income. Family credit goes a long way up the income scale. In this tax year it will go to nearly £10,000 a year of pre-tax income for those with two children aged 14 and 16. That is about 70 per cent. of average earnings, which is about what average male manual earnings have been for a long time. A system that goes to that level is reasonably generous. Clearly, it could be more generous. If it is suggested that means-tested benefits should go further up the income scale than 70 per cent. of average earnings, we are getting into dangerous territory. It is almost what my hon. Friend the Member for Northampton, North (Mr. Marlow) was suggesting: to help everybody, above and below average earnings. Obviously we cannot do that. There is no point going beyond whatever average earnings happen to be.
A means-tested system that pays benefits to people earning £10,000 a year with two children is reasonably generous. I understand that the average payment to recipients of family credit is about £25 a week. Sixty per cent. of recipients—nearly two thirds—receive benefit of more than £20 a week. There must be a withdrawal rate and I understand that that is the criticism of the system. The trade-off between universal and means-tested benefits is that a means-tested benefit must have a withdrawal rate. To compare means-tested benefits with the hightest rate of tax is a fallacy because they are not the same. To receive benefit at the expense of other taxpayers, which is withdrawn as one gets better off, is fundamentally different from paying more money in income tax as one earns more money. One is a benefit and the other is a liability where people are paying tax. It is axiomatic that we cannot have a means-tested benefits system that does not have a withdrawal rate or, what would be worse, some sort of precipice-type cut-off.
The social security system reforms of the past two or three years mean that means-tested benefits are now based on after-tax income. In retrospect that is an incredibly simple and obvious reform. It escapes me why none of us


came to that conclusion before. It has made a fundamental difference as the rates of withdrawal can never exceed 100 per cent. I realise, however, that once one adds together housing benefit and family credit one can achieve high rates of withdrawal. It would be nice to be able to make those more moderate, but the only way of doing that would he to extend the benefit even further up the income scale to those earning more than the 70 per cent. of average earnings.
5.30 pm
My right hon. Friend the Minister is obviously in a much better position than I am to respond to the specific criticisms of the hon. Member for Livingston about the statistics for take-up. The take-up rate is usualy quoted in terms of the percentage of eligible individuals taking up benefit. Some of those are entitled to very small amounts of benefit. The percentage of the eligible money that is taken up is much higher. I believe that I am right in saying that about 65 per cent. of the money available is being taken up, while it is taken up by only 50 per cent. of the individuals. That appears to show that those who are not taking up benefit are those who, on the whole, are entitled to relatively small payments and have relatively low entitlements.
However, those who are entitled to relatively large payments under the family credit system are taking up their entitlements. I welcome my right hon. Friend's efforts to encourage more people to take up family credit. I do not believe that any stigma should be attached to it. I do not accept that there is some sort of stigma attached to family credit that is not attached to child benefit because one does not have to ask for child benefit. There is no stigma, because, for example, employees can have family credit paid through their wage packets. One does not have to obtain a Department of Social Security book and collect it from the Post Office every week. I hope that more people will take up family credit because it is far more effective than uprating child benefit in helping people who need help.
We have a crazy system of redistributing £4·5 billion —some 1 per cent. of our GDP—by recycling it through the tax and social security system. We have a system where those in real need—those on family credit or income support—would not be helped by either of the new clauses or by any uprating of child benefit. We should continue to move, as I believe we are, to a system of letting people who are able to look after themselves do so. The state should not be an unwelcome intervener in their financial affairs.
I do not believe that anyone coming down from Mars today, who was asked to deal with the difficulties of low-income families bringing up children, would reinvent the child benefit system. I find my second proposition even harder to believe than my first, which is that the cost of uprating the child benefit by £1·10—which has been under-indexed—would be in excess of £600 million a year. If the Government said to my right hon. Friend the Member for Aylesbury (Mr. Raison) or the hon. Member for Birkenhead (Mr. Field), "We have £600 million this year to spend on helping families with low incomes to bring up children", I do not believe that they would choose to scatter that money by paying £1·10 per week for each child. They would choose to target it. They do not like the word, but, if they were presented with the money and the option, that would be their choice.
I say to some of my right hon. and hon. Friends that I hope that they will take account of the way in which the world has moved on in the past 10 years and the extent to which disposable incomes have risen substantially at all income levels. It is time that we stopped taxing middle-income people so that we can give them benefits. We should continue with the system of giving tax cuts to those who are capable of looking after their own affairs and giving generous help, through the social security system, to those who are not.

Mr. Alice Mahon: Having listened to the speech of the hon. Member for Lewisham, West (Mr. Maples), I feel depressed. If that is the attitude of Tory Members I certainly do not hold out any hope that either of the two new clauses will be passed. The hon. Gentleman's attitude reflects his lack of any real life experience of bringing up a family on low income. I was also deeply shocked by his complete lack of understanding about the position in which many women find themselves. The hon. Gentleman would not give way to an Opposition Member, possibly because he knew that we would point that out. There was an absolute lack of understanding of the fact that the majority of children are brought up in a family by the mother. Even in families of middle incomes, husbands often do not pass their incomes to the women. My husband worked very hard, but he was still not well paid, so I have experience of bringing up children on a low income. I am possibly one of the minority who can pass on experience of the fact that that income in the middle of the week—I drew it on a Tuesday—was a lifeline. When one is on a small income, if one needs an extra pair of shoes, is running out of food or has a bill coming in, child benefit is useful. The hon. Gentleman's lack of understanding of how an awful lot of people budget and manage their incomes beggars belief.
Late in the 1980s the Child Poverty Action Group carried out a survey that showed that one in five children lived on or below the poverty line. I found that a distressing survey and I felt deeply ashamed that I lived in a wealthy country which could produce such statistics. After that survey, all informed opinion pointed out that the freezing of child benefit would make the position for many children considerably worse.
I believe that it is worth emphasising the values of child benefit over and over again, and I hope that my hon. Friends will do the same. The money goes to the mother. The take-up rate is 98 per cent. The hon. Member for Lewisham, West did not put forward any argument to diminish the importance that people in receipt of child benefit place upon it. It does not affect the poverty trap and it is cheap to administer. The mother knows the value of child benefit, because often it is her only income.
I hope that common sense, compassion and care will prevail in this short debate on child benefit. Looking at the suits around me and considering the lack of any kind of experience of most hon. Members, I do not feel too positive about the outcome of the debate. If the Government persist in freezing over and over again what is a universally accepted valuable benefit, with the intention of allowing it to wither on the vine, they will go down in history as the Government who took us back to the Dickensian state of the 19th century and before, when we had ragged children as the norm rather than the exception. I hope that hon. Members will vote for the new clauses.

Sir Ian Gilmour: I wish to speak in support of new clause 2. As my right hon. Friend the Member for Aylesbury (Mr. Raison) made his argument so effectively, I shall not need to detain the House for long.
As the hon. Member for Halifax (Mrs. Mahon) said, child benefit has a number of considerable advantages and has a 98 per cent. take-up. It is paid to the women, to which my hon. Friend the Member for Lewisham, West (Mr. Maples) objected. He did not give much reason for that. It seemed just neo liberal dogma that the state should not do such things. The fact is that the overwhelming majority prefer it paid in that way. Until recently, if not still, the Conservative women's organisation was in favour of such method of payment. I do not believe that some sort of dogma about what the state should or should not do should interfere with what most people want and what many people believe is sensible and right. As my right hon. Friend the Member for Aylesbury said, it loosens up the poverty and unemployment traps, and it is fair. Since the days of William Pitt, it has been generally realised that it is more expensive to have children than not. If William Pitt had been here this afternoon and heard my hon. Friend the Member for Lewisham, West, he would have thought that he was the man from Mars and would have rubbed his eyes and ears with astonishment at what my hon. Friend said.
Against the formidable arguments in favour of child benefit the Government have two. One is that it costs a lot of money, and the second is that benefits should be targeted, but, in fact, it does not cost a lot. It is worth comparing child benefit with expenditure on other allowances. Child benefit costs £4·5 billion, the single person's income tax allowance costs £9 billion, the married man's income tax allowance costs £14 billion, the wife's earned income allowance costs £3·5 billion, the mortgage interest rate relief costs £6·5 billion and private pensions cost £10 billion. Against all those figures I do not believe that £4·5 billion for children is excessive. Furthermore, as my right hon. Friend the Member for Aylesbury has said, child benefit is the only benefit that the Government and my hon. Friend the Member for Lewisham, West favour targeting. All the other benefits are universal, so why should the Government and my hon. Friend pick on children? Why should they be the first to go to the wall? Therefore, the Government's first argument is not right. Child benefit is not relatively expensive.
The Government's second argument is that it is more important to give money to the really poor, but there are several answers to that argument. As I understand it, only one third of the money that is saved by not uprating child benefit is going to the really poor this year; the remaining two thirds is not being paid out. Even if the Government's argument was right, why should money for the really poor be paid at the expense of other families with children? Above all, why should it be paid at the expense of the nearly poor? If the Government feel the need to help the really poor—I am glad that they do—why should not that money come out of general taxation rather than from child benefit?
It is well known that targeting does not work. I welcome my right hon. Friend's new campaign—or relaunch—and I hope that it will be successful. The figures suggest that things are getting better, but no one pretends that there will be anything like such a big take-up of the new benefits as there is of child benefit.
It is slightly misleading to say that child benefit does not help the really poor or that, conversely, not putting it up does not hurt them. That is a source of argument between my hon. Friend the Minister of State and myself. During our previous debate on this subject I said that, by not putting up child benefit, the Government would hit
some of the least well-off people".
When my hon. Friend wound up the debate he said:
It is not true that, by not uprating child benefit, we shall hit the least well-off."—[Official Report, 18 January 1989; Vol. 145, c. 365, 384.]
I wrote to my hon. Friend after that debate to point out that I believed that he had misled the House, inadvertently of course, and that he had got it wrong. He wrote me a letter back of, I am sure he would agree, remarkable ambiguity and obfuscation. I wrote two more letters to my hon. Friend, but he did not reply; he is a busy man. It is, however, worth analysing what he said, not because he misquoted me—that happens to all of us, but my hon. Friend could have admitted it—but because I had said that "some" of the least well off would be hit, while he said that it was not true that the Government would hit the least well-off. It is true, however, that not uprating hits some of the least well off.
My hon. Friend's answer was based on at least three false assumptions. First, because of the take-up of the means-tested benefits some of the least well-off do not take up the benefits and therefore they are hit by child benefit not being uprated. Secondly, entitlement is too restricted and there is too much red tape on means-tested benefit.
Recently someone wrote to me whose husband is a theatre technician without regular work. The family is ineligible for family credit because the work is too irregular and is ineligible for income support because of the earnings rule. Those people are hit, and my hon. Friend the Member for Lewisham, West should bear such cases in mind. As a result of that letter I tabled a question and my hon. Friend the Under-Secretary of State admitted that there were a number of people in such circumstances.
The second assumption is that means-tested benefit, if it is claimed, will go where it is meant to go. That is true of family credit, but that is not necessarily true of income support. That benefit may stick with the husband and never reach the wife. The third assumption, to which my hon. Friend the Member for Broxtowe (Mr. Lester) has drawn attention, is that money is all that matters. Security, however, is equally important. The great advantage of child benefit is that the recipient knows that she will get it, but that is not the case of people who zoom in and out of eligibility for means-tested benefits.
Apart from all the other disadvantages of not uprating child benefit, it is clear that the Government have hit some of the least well-off by their actions. That is why I deeply regret their actions of the past two years, which I believe have been shameful.
Children in Britain from two-parent families are more likely to be poor than similar children in any other comparable country. That is not true of children from a one-parent family, which I welcome, but the first fact is shameful. The Government should deal with it straight away. At the very least they should accept new clause 2, and after that I hope that they will make up for the upratings that they have missed in previous years.

Mr. John Battle: The last time we debated this issue was 18 January. At that time the Secretary of State tried to convince the House that child benefit went to too many people who did not really need it. That was the core of his defence for arguing that it needed to be targeted. No doubt I have anticipated the right hon. Gentleman's reply to this debate. In January he came out with the rather surprising assertion:
Conservative Members have pointed out many times in the past that 70 per cent. of the families who stand to gain from child benefit have incomes above average earnings.
That statement was echoed today because of the emphasis given to average earnings. We should handle the computation by average earnings extremely carefully.
As the hon. Member for Lewisham, West (Mr. Maples) said, it is not commonly known that the average earnings figure in January, when we last debated this issue, was £258 per week. Many of the people that I represent get nowhere near that figure as part of their weekly income. I look somewhat askance at the idea that they are somehow pulled into the average.
In today's edition of the Financial Times an article reminds us that the wages of Britain's managers have gone up substantially. Surely such increases pull up average earnings without necessarily suggesting that those earning below that figure have had any increase in wages. Such people's income could be decreasing, although those at the top find that their incomes are increasing. That is the difficulty of computation by average.
As a result of the Secretary of State's claim that
70 per cent. of the families who stand to gain from child benefit have incomes above average earnings"—[Official Report, 18 January 1989; Vol. 145, c. 361.]
I tabled a question asking him to spell out exactly who are the 70 per cent. who receive the benefit. That percentage is a striking figure as it suggests that many people are on above-average wages, especially as the benefit is given to those with families. The reply I received modified the earlier statement as it said that the 70 per cent. mentioned did not include those on means-tested benefits.
I went to the statistical section of the Library and asked it if it could help me with the 70 per cent. figure. On its computation it found that 48 per cent. of potential recipients have above average earnings. It also said that even if those 1.5 million families who are so poor that they claim means-tested benefits were taken out of the calculations, at best only 60 per cent. were on above average wages.
The hon. Member for Northampton, North (Mr. Marlow) intervened earlier to say that gains represent the favourite figures. I believe that the quality of the official information available to the House and to the country is crucial when we are making decisions about the benefit and taxation system. Such information means that people are plain about where they stand.
It seems to me, to give it the best interpretation possible, that the Secretary of State has really tried to create the impression that those who receive the child benefit do not really need it because they are doing so well, yet when we consider the individual incomes of people we can see that that is manifestly not the case. What I am saying has been graphically demonstrated already by the right hon. Member for Aylesbury (Mr. Raison). This Government occasionally apparently operate on the principle that the truth is a matter of presentation rather

than of facts or information. Sometimes we receive a form of statistical fiction that reduces people to and computes them as an average rather than relating to their real circumstances and the incomes on which they have to live.
In fact, the element of child benefit is absolutely vital to the income support of the poorest section of the population. The failure to uprate the child benefit actually pushes poor people into means-tested poverty. I asked a question about how many more people would be pushed into needing means-tested benefit because the child benefit was not upgraded. The Minister replied that there was an estimated increase in those claiming family credit, a s a result of not uprating child benefit, of between 20,000 and 25,000 families, so that about 80,000 people in our society are affected. If the effect of the shift from child benefit to family credit is interpreted in the amounts of money that the Department of Social Security is actually paying out, also revealed is the fact that a reduced sum is paid out: by the Department to those on the lowest income, be they on family credit or child benefit, or a combination of both.
I asked the Secretary of State how much extra spending on family credit was attributable to the freeze in child benefit. He replied that when the 1989 uprating was announced it was estimated that the total cost of the family credit uprating would be £128 million, of which £23 million was directly attributable to the 45p added to the child benefit rates as compensation for the child benefit standstill. By parliamentary question, I pressed the matter further by asking what would have been the cost last year of uprating child benefit in line with earnings. The reply was that it would have been £260 million for the financial year 1988–89, net of savings on other benefits.
From that answer it is clear that the amount saved by the failure to uprate was 10 times the amount offered back in the assistance to family credit. It does not take a mathematical genius to deduce that a large sum has been taken out of the system of income support to the poorest people, either through the family credit system or child benefit. The scale of the cut in income as a result of freezing the child benefit has meant real hardship for families.
It is worth reminding the Minister that, for those who receive the lowest 10 per cent. of income, one fifth of that income is child benefit. Since that benefit has, in effect, been cut four times since 1979, it is also true that the overall level of benefits has been reducing.
Although some Conservative Members say that the problem is solved by tax cuts, they do not acknowledge that many people now receive such low pay that they do not pay tax, being totally dependent on the benefit system. In that sense, tax cuts cannot redistribute income in the way that Labour Members like to see happen. It is surprising to hear some Conservative Members say that the Government should not even be involved in the principle of redistributing income. We should remember that the number of families living in poverty in what still is a relatively wealthy country is a reflection of the Government's policies.
Other hon. Members have given positive reasons to support the payment of child benefit: it is more efficient to administer as a universal benefit; its rate of take-up is very high; the payment of the benefit is prompt, reliable and regular; it is paid to the mother; and people know where they are with their income from week to week. Child benefit is a vital form of regular income support to the poorest; it is a major element in family budgeting.
An issue that still hangs over from previous debates, haunting them, as it haunts this debate, is the quality of the official information given in the debates and in answer to our questions. The Government continue to misrepresent the facts so that they can make cuts in social security spending. It should be said in this House and outside that the price of such reductions is paid by the poorest members of our society.
The Secretary of State for Social Security has assured us previously that he does not intend to let child benefit wither away by never uprating it again, but he must prove what he says. It is up to him to demonstrate that he will not let it wither away. One way in which he could do that would be to accept the new clauses.

Mrs. Gillian Shephard: The aim of both new clauses is to commit the Government now to uprating child benefit in line with inflation and to be effective from April 1990. The aim is seductive in its limitation and obviously chosen for that purpose, but I believe that it should be resisted. Changing circumstances have benefited the vast majority of people in work in this country, particularly the increase in prosperity of the average working man over the past 10 years. Significant tax cuts have also contributed, with improved employment prospects for many people in large areas of the country. This situation surely means that the Government should review child benefit, as they are statutorily committed to do, and not have the outcome of that review pre-empted, as the new clauses seek to do.
I believe that such an aim was held when child benefits were first introduced. When she was Secretary of State for Social Services, Barbara Castle said that the benefit was a tax-free supplement and therefore not a major means of support to families whose major source of income was earnings. She said that indexation was inappropriate, and that she thought Parliament would wish to be flexible about the emphasis it put on different factors of family support in future. In other words, the aim when the benefit was introduced was that it should be reviewed in the light of changing circumstances, and that is what the Government are committed to doing.

Sir Ian Gilmour: That may be what the Government said at the time, but is my hon. Friend also aware that the then Conservative Opposition were in favour of upgrading the benefit twice a year?

Mrs. Shephard: My right hon. Friend would know much more about that than I. It has certainly been the consistent aim of this Government's social security policies that the benefit should go to those in the greatest need. I maintain that, by definition, that aim cannot be fulfilled by the universality of child benefit. It seems curious that anybody purporting to argue for fairness, justice and an equitable use of taxpayers' money could possibly support a benefit which pays nearly £1 billion to 1·25 million families earning £20,000 or more a year. Yet the benefit does not provide anything to people on family credit and income support.

Mr. Marlow: As my hon. Friend is aware, child benefit partly replaced the child tax allowance. Would my hon. Friend like to see the child tax return? That would probably satisfy some of the concerns.

Mrs. Shephard: I am arguing that the Government should review their policy of uprating at the appropriate time, which is next autumn, in the light of the circumstances pertaining then, and in line with the original intention. I am not, as my hon. Friend appears to be, arguing for a thorough-going change of the system.

6 pm

Mr. Simon Hughes: The hon. Lady started her speech by saying that the average income has risen over the past 10 years, as it has. If we are to review what social security payments should be made, should we not also remind ourselves that the gap between the most well-paid and the least well-paid has increased substantially in the same 10 years? Therefore, the relative benefit to the poorest of a fixed rate benefit such as child benefit is much more substantial and much more needed now than it was 10 years ago.

Mrs. Shephard: The system of family credit and income support, targeted as it is, is much more effective in helping people at the bottom of the income scale than a universal benefit such as child benefit.

Mrs. Margaret Ewing: Surely the argument against income support is that its take-up rate is only 40 per cent., whereas a universal benefit reaches 100 per cent.

Mrs. Shephard: I am going on to tackle that point. The hon. Lady is right to point out that the take-up of family credit has perhaps been disappointing, but my right hon. Friend the Secretary of State last week announced both a thorough-going publicity campaign to bring family credit to the notice of all those who might benefit from it and, much more significantly, a simpler form on which to make the claim. The original form was difficult to understand and use. The combination of these two initiatives will increase the take-up significantly.
The combination of the changing circumstances that I have outlined and the effective and vigorous campaign now mounted by the Government over the take-up of family credit gives credibility to the Government in their aim to review the situation in the autumn. It will then be possible to make a judgment about the changing circumstances and about the effectiveness of the take-up of family credit. I support that aim; and these new clauses, which would pre-empt that review, should be resisted.

Mrs. Margaret Ewing: I shall endeavour to be brief and I shall not follow the line adopted by many others of going through a series of complex statistics, because I feel that many of them have not added to the debate but have rather detracted from the basic principles that underpin our comments and the way in which we vote. My hon. Friends in the Scottish Nationalist party and Plaid Cymru will be supporting both the new clauses.
Targeting tends to dominate our debates on social security payments and how we allocate benefits. One of the tragedies is that, basically, no one disagrees with the concept of targeting benefit on to the people who most need it. However, the problem is that targeting has failed miserably. It can be effective only if we have a much more progressive taxation system. Comparing this debate with what happened in the Budgets last year and this year shows that the Government are bringing in a regressive taxation system that benefits the rich and penalises the poor. Until we can have a progressive taxation system, we


have to look to the continuation of universal benefits to ensure that benefits reach those on the lower incomes who most desperately need the assistance that we can give them.
In my intervention in the speech of the hon. Member for Norfolk, South-West (Mrs. Shephard) I said that family credit has a take-up level of only 40 per cent. It is all very well for the Government to argue that there is now a massive advertising campaign to encourage people to take up this benefit, but it has been in existence for some time, and there are many reasons why people do not pursue it. One of the main reasons is that it is means tested and people have to go through a complex procedure to obtain it. All the monitoring of how the family credit system is working shows that the means-testing aspect is one of the key reasons for the low take-up.
I have no faith that the advertising campaign will have the impact that hon. Member for Norfolk, South-West suggested. If she believes that there should be additional assistance to people in the lower income groups, she should be supporting the new clauses, if for no other reason than that the Government should take account of the reality in which so many of our constituents live.
The hon. Member for Lewisham, West (Mr. Maples) said that there is no moral compulsion on the Government to increase child benefit. However, I believe that there is, not least because the Government made it clear in their manifesto that they intended to continue to pay child benefit. While we may go into the niceties of their language, those of us who read the manifesto understood it to mean a regular uprating of child benefit. That commitment was widely welcomed. The other moral compulsion is that the Tory party claims to be the party that supports families. The continuation and uprating of child benefit is a major aspect of supporting family life in the United Kingdom.
I support the arguments advanced by the right hon. Member for Aylesbury (Mr. Raison). He referred to the community charge rebate system and to the fact that the Government anticipate that a large number of people in the poorer income groups will be eligible for such a rebate. It is well seen that he does not represent a Scottish constituency because those of us who do know that many of the poorest families, irrespective of the fact that they may have had the largest rebate made available to them on the community charge, are worse off than they ever were. For many of the families this is compounded by the freezing of child benefit. More and more of them are forced into the poverty trap by a whole series of measures introduced by the Government.
Women Members of Parliament should speak not only for their constituents but for women throughout the whole of the United Kingdom when arguing for the uprating of this benefit. One of the sadnesses of my life is that I am not a mother, but I do not begrudge paying my tax if it will be targeted on children. I come from a happy family home. We had to budget carefully and tightly. I remember how important the family allowance was to my parents, who ensured that my brother and I had the opportunities that they wanted for us. If having 41 women Members of Parliament is a major advance for women, all 41 of us should be in the same Lobby tonight, fighting for the women of the United Kingdom to ensure that they have the opportunity to bring up their children on the level of

income that we would wish them to have. Therefore, I urge all women Members of Parliament to support these new clauses.

Mr. Tim Rathbone: I am pleased to follow the hon. Member for Moray (Mrs. Ewing), who was advocating action within this House, by her party, for the benefit of this nation as a whole. I hope that we hear many more arguments from that corner of that Bench on that subject along that theme.
I support my right hon. Friend the Member for Aylesbury (Mr. Raison) who spoke to new clause 2 admirably. I remind my hon. Friend the Member for Lewisham, West (Mr. Maples) of the way in which, only in 1975, child benefit was introduced with all-party support. It was welcomed as an implementation of the requirement
to make relief in cases where there are a number of children a matter of right and a matter of honour.
That was stated categorically by William Pitt 200 years ago, as my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) pointed out. Conservative Members have welcomed child benefit, particularly as a partial implementation of the Conservative Government's Green Paper initiative for a full tax credit scheme, which grew out of some of the thinking and studies of my late hon. Friend, Sir Brandon Rhys Williams, who contributed so much to arguments in this sphere and who we miss most particularly today. My right hon. and hon. Friends argued in favour of the inclusion of child benefit in annual uprating reviews so that it would at least be kept in line with inflation.
Child benefit replaced child tax allowance, which replaced the family allowance. If child tax allowance had continued, it is inconceivable that it would not have been increased as other tax allowances have increased. The same argument applies to child benefit.
Much of the discussion this afternoon has centred on the pros and cons of means testing and targeting, as with family credit, versus universality, as with child benefit. My hon. Friend the Member for Lewisham, West made a careful analysis of that, and the thrust of his argument was supported by my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard).
I shall make five points which cut through to the truth. I hope to puncture some of the misleading statements that have been made and, with all due deference to my hon. Friend the Member for Lewisham, West, the misleading claims that he made.
First, it is misleading to claim that richer people gain a greater reward from universal child benefit. Child benefit is a cost to middle and high income earners without children. It is a benefit to middle and low income families with children and it does not make much difference to richer families with two or three children, or to poorer familes without children. The only real anomaly lies with richer families with four or more children but, for heaven's sake, it must be better to use overall taxation policy to establish tax takes from them than to do away with child benefit for all.
Secondly, as right hon. and hon. Members on both sides of the House have pointed out, universal benefits are far cheaper to administer than family credit, which, I understand, still costs £3·80 for each £100 of benefit, compared with £1·40 for basic retirement income or £1·90


for child benefit. Moreover, that cost does not include the extraordinary, but welcome, £7 million promotion cost for family credit, which is not needed for child benefit.
Thirdly, targeting is surely a means of getting benefit to those who need it, not just aiming them in the right direction. Child benefit has a 98 per cent. take-up. In other words, it does not arrive with 2 per cent. of people who should get it, but we do not know where that 2 per cent. falls. Family credit reaches only 50 per cent. of eligible employees—253,000 people—and 24,000 or so self-employed people. That means that 253,000 employees' families and an unknown number of self-employed people who should be getting it are not. That is a translation of percentages into people, and the picture is quite horrific.
Fourthly, means-tested benefits create poverty traps, disincentives to work and incentives to dependency, and they erode pride and independence. Universal benefits do not, as my right hon. Friend the Member for Chesham and Amersham ably demonstrated. They are also more secure sources of income in the hands of the people who need it most—the parents of the child.
Fifthly, universality is valuable per se because it is a mark of a civilised society. It applies to Government services, whether they be street lighting or the police, and it applies to many Government benefits such as pensions. Why should it not apply in the same civilised way to benefits for children?
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In the absence of a better, more benign, more efficient and more effective form of family assistance, child benefit should be uprated in line with inflation and linked to tax allowances not frozen to death.
The last remaining question has to be, "Can the country afford it?" Although it is included in the public expenditure projections, as my right hon. Friend the Member for Aylesbury said, that question has still to be answered. Whatever the cost, it is not a fresh burden. Rather, it is a transfer of purchasing power from people who, because of their larger income or smaller families, can afford luxuries to those who, because of their family size and circumstances, may go short of basic necessities.
To some extent, child benefit involves a redistribution of wealth—but only in a small way—both vertically and horizontally. Vertically, the redistribution is between the better off and the less well off; horizontally, the redistribution is between people on each level of income according to whether they have children to support.

Mr. John Marshall: My hon. Friend talks of redistribution through child benefit. Does he accept that 500,000 recipients of the benefit pay tax at 40 per cent.? What is redistributive about people on a lower income paying tax to finance higher child benefit?

Mr. Rathbone: If my hon. Friend reads Hansard, he will see that I touched on that earlier in my speech.
The point that I have just been making was made by my great aunt, Eleanor Rathbone, who was the hon. Member for the Combined English Universities 55 years ago. We were reminded of that truth 15 months ago by our much revered late colleague Sir Brandon Rhys Williams. Child benefit is part of a consistent Conservative policy towards families of which we as a party and the Prime Minister and all of the Cabinet can justifiably be proud.
The country has responded, and wants to continue to respond, to bold and generous leadership. Where can that be truer than in maintaining and developing the wellbeing of our greatest asset—our children? There is no better investment. There is no greater reward. I urge my right hon. and hon. Friends on the Front Bench to accept new clause 2. If they do not, I urge all right hon. and hon. Members to support it in the Lobby so that child benefit can again be the properly valued investment that, in present circumstances, only it can be.

Mr. Frank Field: I support new clauses I and 2. It gives me great pleasure to follow the hon. Member for Lewes (Mr. Rathbone) and, in a sense, his great aunt and the arguments that hon. Members on both sides of the House have presented in favour of increasing child benefit.
I have no intention of taking the time of the House by going over ground that has already been covered. Others have ably made the case for the new clauses. For two reasons I want to pick up on something that the hon. Member for Lewisham, West (Mr. Maples) said. First, he introduced a new note into our debate. If Eleanor Rathbone were here today, or if we could have a seance with her, she would say that we should be taking note of that change.
The debate is moving, and was neatly summarised by the hon. Member for Lewes. Those of us who support child benefit have to take into account the new element of rising living standards, and decide whether they have risen to such a degree that the proponents of a universal benefit have to re-think their position. I hope that no Opposition Members will deny the rise in living standards. It is why the Government win elections. People do not elect Ministers because they are better looking or more able than Labour Front Bench Members—as a group they are not. They elect them because the majority of people realise that the trough that is put before them is bigger than it was before and they are worried that if we touched down on the Treasury Bench that trough would either shrink or be removed entirely. Our case against the Government is that, at a time of record living standards since the industrial revolution, one group has been deliberately excluded and we cannot support the emergence of an underclass without conceding what the electorate has known for three elections—that living standards have been rising at a record pace. Therefore, we have to take on board that new element.
I shall address the dilemma by answering the question that the hon. Member for Lewisham, West asked the right hon. Member for Aylesbury (Mr. Raison)—if we had £600 million, would we put it towards a universal increase in child benefit to make up the shortfall that has occurred under the present Government? I would do that without any hesitation but perhaps for different reasons than have been put forward so far.
I would fit a big increase in child benefit into a policy of taxation and incentives for those at the bottom of society as well as for those at the top. Despite the Government's rhetoric about freedom, and despite what the Prime Minister says about disengaging from the nanny state, she runs an enormous nanny state. Our tax system bribes people to undertake certain forms of expenditure to such a degree that half all personal income is exempted from taxation by way of tax allowances. I want the Labour party to be committed to a policy of phasing out all those tax allowances and introducing a standard rate of taxation


of between 12p and 15p in the pound. That policy would entail some losers. Child benefit has a crucial role to play, as one of the groups that will lose out will be low-paid workers with children. Such a taxation system would get rid of the nanny state that the Prime Minister supports so firmly, but if we are so keen on cutting tax rates at every level, there have to be some measures of compensation. It would not be a burden, as the hon. Member for Lewisham, West was suggesting, because such a reduction in taxation together with a significant increase in child benefit would be building floors—creating a society in which people could build through their own efforts without being penalised.
Maybe not in our minds, but in the minds of most of our constituents, there is a difference between claiming a benefit but losing it as one's income rises and paying tax. People make that distinction, but it is not the relevant point. Most of our constituents are also aware that the overlap between taxes and benefits creates major disincentives for those at the bottom of the scale. If we are keen on creating incentives for those at the bottom, as we have been for those at the top, we need a massive increase in child benefit accompanying other major reductions in taxation which will not benefit one penny those who are poorest. It would he foolish and deceitful for Opposition Members to claim that we can move people away from dependency on welfare without going through a very difficult, choppy and unpopular period. The only way in which we can lift people free of means-tested assistance is to phase out the benefits and provide no help whatsoever —in other words, punish—or to increase universal provision such as child benefit. Those who are claiming means-tested assistance would lose that benefit as we increase child benefit. That would be unpopular, but if we are ever to get millions of low-income families out of the nightmare of dependency on state welfare, we have to go through that phase.
My view is very simple. I do not think that the hon. Member for Lewisham, West was right to say that he is winning the argument in the Chamber. He is losing the argument in the Chamber, but he may win the vote. If he wins the vote tonight, Opposition Members and Conservative Members who are friends of child benefit must face reality—the Secretary of State cannot stand up and tell us that he is opposed to child benefit and that only over his dead body will there be an increase in child benefit. If he does, he knows that he cannot fulfil the terms laid upon him by the Child Benefit Act to review the benefit impartially each year.

Mr. Favell: May I repeat the question that I put to the hon. Member for Livingston (Mr. Cook)? As I understand it, the hon. Member for Birkenhead (Mr. Field) is arguing for universal benefits for all. Is he in favour of abolishing family credit?

Mr. Field: My argument makes it irrelevant. The increase in child benefit that I propose would lift most people free of claiming family credit. It would not abolish family credit but it would make it irrelevant.
The Secretary of State cannot get up and say what he really thinks about child benefit, therefore we have to use and interpret his political body language. It is clear that he has a deep hostility to child benefit. I will bet anybody any

amount of money that while the right hon. Gentleman is Secretary of State for Social Security there will be no increase in child benefit.
Are we to gather the clans and debate child benefit two or three times a year and go away satisfied, or are we to take the argument into the Government's camp? Such an opportunity will arise because when the Finance Bill returns to the Floor of the House I shall table an amendment to reintroduce child tax allowance. Of course the value of child tax allowance will have fallen because the basic rate of tax has been cut since 1979, at least nominally. But had child tax allowance been continued and increased in line with married man's tax allowance, the tax burden would not have been shifted from childless people and single people to those with children because we have not increased child benefit. That is why the reintroduction of child tax allowance is relevant.
If we are concerned about delivering resources to families with children, under this Government we have no choice but to take that route. Some would say that that was selling out child benefit. I repeat that I probably owe my place here to the work that I did with an organisation campaigning for child benefit. I am mindful of that, but I organised and helped that campaign on child benefit because I was interested in delivering to families real resources rather than token gestures.
We have a simple choice. If we are defeated tonight, either we can concede defeat and rejoice that we have put up another good fight, or we can become serious politicians about delivering resources to families with children. The only option that we have under this Government is to reintroduce child tax allowance. There will be life after Thatcherism, despite what the Prime Minister maintains, and another Government would have the opportunity to use resources committed to child tax allowance and convert them back into child benefit. There would not have to be the unhappy scramble of lobbying the Treasury for sufficient resources—£600 million according to the hon. Member for Lewisham, West—to make up the shortfall that has occurred under the present Government.

Mr. Moore: I always listen with enormous care to the hon. Member for Birkenhead (Mr. Field). I know that he would not wish to give the House inaccurate information. I do not think that he has seen the written question tabled by my hon. Friend the Member for Hornchurch (Mr. Squire) and answered on Thursday 20 April. It asks specifically if one can take into account the role of tax changes between 1978–79 and 1989–90 and the impact that the changes had on families without children to discover the amount by which one would have to increase child benefit to achieve the same impact. I am sure that he would want the House to know—he is honourable in such matters, especially in the way that he is putting his point —that one would have to reduce child benefit in the cases referred to by my hon. Friend the Member for Hornchurch, who is not unknown as being a supporter of child benefit.

Mr. Field: It is a terrific advantage that I have not seen that parliamentary answer. I shall come back to it on another day. I am sure that the Secretary of State would not want to stop me in mid-flow as I am about to complete my comments.
If we are defeated in the Division on the new clauses —I hope that we will not be—I hope that the seriousness with which we put our arguments will have been noted. We will be equally serious about amending the Finance Bill as the only opportunity under this Government to get resources to families with children is by reintroducing child tax allowances. I hope that the strength of our rhetoric will be matched by the voting during the Report stage of the Finance Bill.

Mr. Simon Burns: It is always a daunting prospect to follow the hon. Member for Birkenhead (Mr. Field) who is an acknowledged authority on social security. He made one point with which I can agree in principle, although not in practice. He said that positive efforts should be made to help children, rather than mere gimmicks. I suspect that the difference between the hon. Member for Birkenhead and myself would be in interpreting the principle. We should put the debate on child benefit in the context of the fact that between 1974 and 1979 the real-terms value of income support benefits for the family fell by 7 per cent., whereas in the last decade it has increased by 27 per cent. I think that I am right in saying that the hon. Member for Birkenhead, in a previous life with the Child Poverty Action Group, was critical of the Labour Government and their record on providing financial help to families.
I part company with the hon. Gentleman on how one gives the maximum amount of financial help to the most genuinely needy children.

Mrs. Beckett: I do not want to distract the hon. Gentleman from the thrust of his argument, but I should put it on record that the figures he has quoted are a peculiar and motley collection of statistics. They include support given to carers of elderly people, not merely children. Also, they primarily reflect the number of people dependent on benefits because of the increase in unemployment.

Mr. Burns: I was talking about family support. I did not target my comments specifically at children. I am sure that the hon. Member for Derby, South (Mrs. Beckett) finds the figures somewhat curious because they do not support her argument. They put fairly and squarely the real-terms support that the Government have given to the family over the past decade.
I find the present child benefit arrangements extraordinary because—I speak as a parent of a young child, so my wife benefits from the system—6·7 million families in Britain with 12 million children receive £7·25 tax free every week. Of the £4·5 billion—10 per cent. of the social security budget—spent on child benefit, £1 billion goes to 1·25 million families earning over £20,000 a year. I cannot understand, taking it to its logical conclusion, why the wife of a Member of Parliament or a Cabinet Minister should receive the same tax-free sum as the most genuinely needy members of society. I would be happy, as would my wife, for that money to be targeted towards those genuinely in need, because it would be of much more financial help to them.

Mr. Christopher Hawkins: On that argument, would my hon. Friend get rid of the single

person's allowance on the ground that it is worth more to higher rate taxpayers? Would he abolish the married person's allowance, the business expansion scheme and mortgage interest tax relief on the ground that they are worth more to higher rate taxpayers?

Mr. Burns: I should have anticipated that intervention because it is not the first time that we have heard it during this debate.

Mr. Frank Field: Answer it.

Mr. Burns: I shall answer it in my own way.
We are discussing the way to target the maximum amount of resources to the most needy in society. I believe that child benefit for families such as mine is unfair and is not the best way to use resources. That is why my right hon. Friend the Secretary of State was right to freeze child benefit for two years and, in the uprating this year, to target the money to the child allowance part of the other benefits. If hon. Members study the figures they will see that, over and above the uprating, he is increasing by 50p per child the amount available in income support and housing benefit.

Mr. Jeremy Corbyn: I am glad that the hon. Gentleman has found his tongue after his long silence in Committee. Will he acknowledge that the position of children in Britain has become worse as a result of the policies pursued by the Secretary of State and that the failure to uprate child benefit has compounded the problem? Does he agree that even the change in the more recent announcements does not compensate for the loss? Will he recognise that child benefit is intended to benefit children? He has not yet mentioned children. He has talked about tax rates for adults. We are talking about a benefit directed towards children universally. Surely even he must accept that that is a good thing and a benefit to the nation's children.

Mr. Burns: I welcome the first part of the hon. Gentleman's intervention because it was made in complete ignorance. I think that I am right in saying that in the Committee on the Social Security Bill he failed to attend at the start of each of our morning sittings. If you look at the record you will see that you attended far fewer sittings than I did and that I contributed to the debates.

Madam Deputy Speaker (Miss Betty Boothroyd): Order. Will the hon. Gentleman speak through the Chair?

Mr. Burns: I am sorry.
One has to look at the argument about children through the parents' tax position. The money is being given to the mother to spend on the children. My original point—I do not want to make a long speech—is that the current arrangement in which nearly one quarter of those in receipt of child benefit earn incomes in excess of £20,000 is wrong. The money could be better targeted by increasing other benefits so that those in genuine need benefit rather than rich families being given an extra tax-free allowance that would be worth more to them than the poorest families.
I shall support my right hon. Friend the Secretary of State in the Lobby tonight.

Mr. Thomas Graham: The hon. Member for Lewisham, West (Mr. Maples) mentioned average wages. I was an engineer for 20 years


in Scotland, but I never earned an average wage. I worked for a well-known firm in Scotland, but I never earned an average wage of £250. Highly skilled engineers at that well-known firm still do not earn that much. Many people in my constituency make £86 a week, if they are lucky. I live in Linwood—every hon. Member is aware of the closure of the car factory—where there is still vast unemployment. Many wives rely on child benefit and would love the Government to show care and compassion by agreeing to uprate child benefit.
Over 2·25 million children are living at or below the poverty level. The mothers of those kids are desperate and would prefer to receive child benefit every week rather than queue up, be means tested and plead and beg for money for their children. Child benefit should be a right, and tonight the Government have a golden opportunity to agree.
Since the Government took office in 1979, there have been 20 cuts in benefit for the family and yet the Tory party claims to be the party of the family. The Government offer the family despair and destruction and they do not care whether our children have as decent a future as children in other nations. Britain has the lowest level of public funding for child care in Europe, yet in its manifesto the Tory party claims to be the party of the family, which is a travesty of the truth.
Over the past 10 years, child benefit has fallen by 27 per cent. It is unbelievable and ridiculous that we are allowing mothers and children to suffer. Conservative Members must not forget that there are not many people walking the streets of Glasgow and Strathclyde—where there is massive unemployment and poverty—wearing designer clothes or fashion suits from Savile row. They queue up at jumble sales and secondhand shops and buy their furniture secondhand.
The Government have a golden opportunity to redress some of the imbalances and injustices that have occurred since they took office, such as the massive cuts in social security and the punishing of the poor and needy. Conservative Members have an opportunity to ensure that child benefit is uprated. It is a good benefit and has a high take-up rate. They should stand up and be counted so that the children and the poor and needy have some extra in their pockets this week.

Mrs. Marion Roe: The question whether child benefit should be automatically uprated understandably raises strong emotions. As the hon. Member for Livingston (Mr. Cook) said, child benefit has been around for almost a decade and a half. It is a universal benefit, so there is no problem claiming it and it makes a useful contribution to the income of every family with children. However, the fact that child benefit is simple, universal and easy to claim does not constitute a reason for unfailingly increasing its value in line with inflation every year.
If one is to rely on targeting benefits, it is essential that the help reaches those who need it. Conservative Members who regard uprating child benefit as an expensive and imprecise way of helping families in genuine need must be reassured that take-up levels of family credit will rise and that my right hon. Friend the Secretary of State will take whatever steps are necessary to inform those who are eligible of their rights.
It amuses me that at a time when the Labour party is on the verge of unveiling its repackaged tax policy and when phrases such as "fair" and "relevant" rates of tax are all the rage among Labour Front Bench spokesmen, the hon. Member for Livingston is supporting an uprating of benefit that is unfair and unrelated to income.
I fully support the argument of my hon. Friend the Member for Lewisham, West (Mr. Maples), so I shall not waste the House's time by repeating the case that he made, but it hardly seems fair that millions of working people on modest incomes should be paying taxes to fund the £1 billion cost of child benefit for 1·25 million families who are earning more than £20,000 a year. Where is the fairness in that? If the Labour party believes that people on higher income should pay higher rates of tax, why does it not follow through the logic of its argument by accepting that those same people on high income simply do not need increased child benefit? The fact that three quarters of the families who benefit from increases in child benefit have incomes above male average earnings is eloquent testimony to the utterly indiscriminate nature of child benefit.
We have all heard stories of how well-to-do, middle-class families spend their child benefit on extravagant luxuries and sometimes items that have no connection with their children. On any objective analysis, millions of parents in receipt of child benefit have no need for that money. Undoubtedly they are grateful for it, but, none the less, they regard it as a windfall, a bonus or an extra.
I do not believe that the Government should distribute huge amounts of taxpayers' money to those who do not need it. It is curious to see the Labour party defending a system that gives an awful lot of money to an awful lot of people who would not think twice before spending the equivalent of a month's child benefit on a meal out or a couple of compact discs.
Not only does child benefit go to those who are perfectly able to look after themselves and their children, but, to make things worse, increases in child benefit have no impact on the incomes of those in real need—the people on income-related benefits. Given that child benefit already costs the nation £4·5 billion a year, we should be absolutely convinced that benefits will go to those in need before supporting proposals to index link child benefit each and every year.
I see no evidence that uprating child benefit is a cost-effective way of helping those families that need help most. The fact that some people do not claim the income-related benefits to which they are entitled is not a reason for putting even more cash into universal benefits. Far better results for many more families in real need can be achieved simply by making a greater effort to promote income support and family credit. I very much hope that the Government's social policy will follow that course.

Mr. Cyril D. Townsend: I am a stranger to social security debates. I take the view, as do a number of my colleagues, that normally just a few dozen hon. Members on both sides of the House understand the more obscure points of social security and, alack, they are riot saying what they are thinking; they are merely saying what they have been told to say.
This debate is significant. It marks where we are as a Government and where we are tending in social terms. I remember hearing, when in opposition, my Front-Bench


colleagues explaining to the House how important this new child benefit would be. Above all, we were told, at last something would be done about the poverty trap, which we were all busily discussing at the time. We were told that it would be a simple system, that there would be a high take-up rate, and that it would be easy to administer. It was a time of considerable inflation, at levels far greater than today. No doubt my right hon. and learned Friend the present Secretary of State for Health had that in mind when, speaking in Committee on the Child Benefit Bill in 1975, he introduced an amendment for the statutory uprating of child benefit every six months in line with inflation. His words are worth remembering:
I cannot see how a reputable case can be raised against that proposal."—[Official Report, Standing Committee A, 24 June 1975; c. 150.]
To catch the flavour of those days, I point out that my right hon. Friend the then Leader of the Opposition wrote a letter in February 1978 to the National Council for One Parent Families, saying:
We are impatient to implement the child benefit scheme fully. This measure will do more than any other single benefit to help families in caring for their children".
A number of things have changed since that letter was written, one of which has been pointed out by the hon. Member for Birkenhead (Mr. Field). In 1987, he wrote a letter to The Times, saying:
If we leave to one side how poverty is defined, there is general agreement across the political spectrum that, over recent years, there has been a significant increase in the numbers on low incomes. Child benefit directly relates a family's income to the size of its responsibilities.
We are faced as a country with a growing problem of poverty in our inner cities. The family credit way forward is not a working option. To start with, the form on family credit—I do not have the latest document but the one that I have from my social security office has 15 pages—is a Becher's brook of a form, and we should do better. It is not good enough. The take-up rate is only 50 per cent.
We can take any other walk of life. Suppose that we were told that a shop was open for only 50 per cent. of normal shop hours or that a train service was only half operating. They would not be taken seriously and would not be seen to be going concerns. Family credit falls into that category.
There is one personal point which, surprisingly, has not come up before in this debate. We are talking about index linking. I think that it is recognised that index linking is the norm. We have a row about pensions—should they be based on historic rates of inflation or forecasts of inflation —and the Government are winning that hands down, but no one is saying, "How terrible it is that they are index linked". In personal terms, every right hon. and hon. Member has his parliamentary salary, car allowance and London allowance index linked. All those who will vote against the new clause tabled by my right hon. Friend the Member for Aylesbury (Mr. Raison) and his colleagues will be saying, "What applies to me in 1989 does not apply to those mothers in my constituency who are struggling to bring up families. Other factors have crept into the argument. The situation is entirely different."
We have heard about those well-heeled ladies who are worried that they are getting child benefit when they do not need it. Letters from them have not been filling my postbag. If they did, I would say to them, "This benefit

must be physically collected." I have sometimes collected it on behalf of my wife. One has to go to the post office, perhaps on a wet and windy day, stand in a queue and collect it. I would say, "If you are well-heeled and you and your children do not need child benefit, stay at home shampooing the dog or watching EastEnders. Do not waste time". I am told that the great system quietly puts the money aside and it goes back into the common wheal, and no time and effort are wasted by the bureaucracy finding out why Mrs. Jones has failed to collect her benefit. There is, therefore, an easy solution.
This is a serious debate. The family is under great strain in this country and throughout the western world, and I need not enlarge upon that point. The divorce rate, the number of children in care and child poverty are up. Here we have a system that does something about the poverty trap. If we are genuine in our belief that the family is the basic social unit of our society, is it not incredible that we are allowing the financial support for it to diminish over the years? My right hon. Friends must reply to this point: how can we claim to be looking after families when, year by year, we have singled out child benefit to be reduced?
There is also the wider point of where we are tending to go as a Government and a party. What has been the point of running our economy more efficiently and getting greater wealth rippling out through society if we are not prepared as a nation and a Parliament to tackle those pools of poverty that disgrace our cities, if we are not prepared to take note of how many people are homeless in Greater London, sleeping in miserable cardboard boxes, and if we are not prepared to notice that poor families in our towns, cities and constituencies are suffering and we are supposed to represent them?
Winston Churchill had a good phrase. He used to talk about bringing in the rear guard, meaning, in social security terms, looking after those who have fallen behind. If year by year we cut child benefit, or, worse, if in the next Parliament we chop it off altogether, we are not bringing in that rear guard—it will fall further behind and become increasingly isolated and vulnerable.

Mr. Marlow: If I may, let me take the House back to the eloquent, if in my belief mistaken, speech of my hon. Friend the Member for Lewisham, West (Mr. Maples). He seemed to be saying that it was wrong to give benefits to those who were earning more than, say, £15,000 a year. He is an intelligent and civilised man and I expect that he would accept that that is to a certain extent simplistic. He almost suggested that there is a zero sum and that there are those in our society who are financially givers and that there are those who are takers. It is not like that at all. The reality is that we are all givers—we are all taxpayers.
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I believe that the basis of the case of those of us who support new clause 2 is that even for those who are on more than £15,000 a year—which is hardly the wealthy in this day and age and many have very large mortgage commitments—we would like the net take by the state, that is, net of allowances and benefits, to be less from those with children than from those without children. Knowing what a civilised man my hon. Friend is, I would expect him to support that objective.
Let us suppose that two young people set up home and decide to settle down together. There are two mouths and two incomes. A child is born. There are three mouths and,


most typically, one income. Is this the time to freeze or—if I may interpret—to reduce still further their relative financial situation? I believe that it is not, and I think that my hon. Friend will believe that it is not. Housing costs are at an all time high and young couples, some of whom in my hon. Friend's terms are relatively wealthy, have stretched their finances to the limit to get on the housing ladder. Rising interest rates have seen those costs rise still higher—higher than they would have feared and higher than they would have imagined. No one would start a family in order to acquire, or for the sole purpose of acquiring, child benefit, but given the massive financial and other pressures which today discourage young people from having children, it would seem to me to be the politics of bedlam to make life even more difficult. I imagine that it is hardly part of the Government's policy that the race should begin to die out.
I wish to concentrate on one aspect of child benefit and that is the part of child benefit that replaces child tax allowance. I do not know whether my hon. Friend the Member for Lewisham, West or my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard)—who is not here at the moment—are against child tax allowance. I asked them the question. I know that there were a lot of Members who wanted to speak and perhaps they felt that it was not appropriate to answer it at that time. Let me try to sell them the concept of child tax allowance—let me even try to sell it to my right hon. Friend the Secretary of State.
When we had child tax allowance, it was universally approved and universally acceptable. There might have been people who were against the family allowance, there might have been people who said, "Why give money to people just because they have children?", but nobody was against the child tax allowance.
Why should we return to it? First, it allows people to keep more of their own income—a philosophy that is very close to the Government's heart. Secondly, it takes people out of tax, which is particularly important for wage earners seeking to support large families. It is a powerful incentive against dependence—if I may say so, pure Thatcherism. Maybe I have sold it to my hon. Friends, maybe not. If I am trying to sell it to the Government, let me try a more machiavellian approach. At a stroke, by reintroducing child tax allowance, we would reduce the amount of money taken in tax and, at the same time, reduce Government expenditure. I am offering to the Government, overnight, the ability significantly to reduce Government expenditure as a proportion of gross national product. They should grasp that opportunity with both hands.
Child tax allowance was—as child benefit is—the only fiscal measure that recognised the additional burden of families with children at all levels of income. As I intend to support new clause 2 later this evening, I shall probably be in trouble with the Whips—not much, because they are a fairly civilised bunch—but as I am known to be ambitious let me try to curry favour with them at the same time.
May I quote my hon. Friend the Member for Watford (Mr. Garel-Jones)? He said, quite rightly:
Child benefit was introduced to take the place of the old child tax allowance … They were there to achieve some sort of equity at all income levels for families with children as compared to families without children."—[Official Report, 3 February 1981; Vol. 998, c. 204.]

He was right then in 1981. Although he has taken the Trappist vows, let me encourage him by saying that the point he made then is equally valid now. It is particularly valid for the very large numbers of near poor. The Government's policy is targeting. In general, I support that policy, particularly if it hits the right target. But we have a problem with the near poor, especially those who are seeking to maintain their independence, be they elderly or be they families. The problem is that every time we miss the target, we hit the finances of the near poor.
On the Government's own terms, let us look at the argument behind this debate—targeting. If child benefit is frozen, it is decreased. As hon. Members have already said, we are transferring resources from those with children to those without children. Is that what the Government want from targeting? The married man's tax allowance, as has been said, has increased by some 22 per cent. in real terms since 1979.
My hon. Friend the Member for Lewisham, West said that tax rates have been reduced. That is true. My hon. Friend is, no doubt, very proud of that and I am sure that my hon. Friend will go along with me and be quite modest about it and say that, of course, the married man's tax allowance has not increased by 22 per cent. in reality because there has been an 8 per cent. reduction in levels of taxation and it has therefore only increased by 14 per cent. That is not bad—it is an increase. But child benefit has gone down by 12 per cent. and, as I have said before, benefits and allowances are two sides of the same coin.
The question before the Government is that if they want to target—and we should want to target—why target by taking resources from those with more mouths to feed and give them to those with fewer mouths to feed? I am an easy man—a simple man, some might say. I have said that I intend to support new clause 2. However, if my right hon. Friend would undertake to the House that he Wll target—as a Conservative should target—and accept the new clause, or, if he will not accept it, will give some indication to the House that we will go back to the system of child tax allowances, I am sure that I and a lot of my hon. Friends would be satisfied.

Mr. Kenneth Hind: I welcome the opportunity to say a few words about the new clause, I urge the House to reject it for a number of reasons.
We must have a flexible approach to the provision for families. We are faced with the fact that, whatever happens in terms of income or other changes, we have indexing and uprating. The hon. Member for Birkenhead (Mr. Field), who is not in his seat, pointed out that we are now enjoying record living standards. The situation has changed since the introduction of child allowances. When they were introduced, we were living in a high-tax society. We are now living in a much more prosperous and low-tax society, which calls for alternative ways of directing aid to the poorer families in our society.
There are two fundamental reasons for rejecting the new clause. First, no targeting is involved. The top 5 per cent. of earners receive the child allowance in exactly the same way as the bottom 5 per cent. My hon. Friend the Member for Bexleyheath (Mr. Townsend) says that the top 5 per cent. should stay at home and wash the dog. The fact is that they do not. They go out and obtain child allowance; 98 per cent. are claiming it, whether they need it or not. Members of Parliament who, like myself, have children have a disposable income of £300 a week and do


not need extra money in child allowances. Those on low incomes, on the other hand, genuinely need the money and we should target it to their benefit, as my right hon. Friend the Secretary of State is trying through family credit to target those who are worse off. That is what we should be doing, and I welcome the fact that my right hon. Friend is using the media very effectively to seek to encourage a better take-up. I hope that he will succeed.

Mr. Lester: At what level of income would my hon. Friend decide that he could do without his mortgage interest tax relief and his married man's allowance?

Mr. Hind: My hon. Friend makes a good point, and I shall go on to deal with that very question.
My hon. Friends who support the new clause believe that there is no alternative means of protecting the poor and worse-off families. There is an alternative. We should be turning back the pages of history and re-examining the proposals on tax credits in the 1972–73 Green Paper. If we work towards an integrated tax and benefits system, we shall be working towards a progressive method of aiding families with children, whereby those who are worse off get the most and those paying 40p in the pound in tax do not receive benefit. That is a proposal for the future, and the new tax reform proposals will help us to achieve that.
Under a tax credit system, a woman could be given the credit for her children, which would overcome one of the major objections. Child allowances should be paid to the mother. I commend those considerations to the House.
The new clause does not solve the problem; it is too rigid for the future and I shall vote against it.

Mr. Favell: Anyone listening to the debate might go away with two misconceptions. The first is that the debate is about the abolition of child benefit, which it is not. The Government are committed to retaining child benefit. The second misconception is that the inflation-proofing of child benefit—that is what it is all about—will somehow benefit the very poorest, which it will not. If the new clause is passed, 3 million children and 1·5 million families will be not one jot better off.
The thrust of the Government's social security proposals has been to target benefit on those in the most need. I shall be grateful if my right hon. Friend the Secretary of State will tell the House just what the Government have done for the very poorest.

Mr. Lester: I support all those who have spoken in favour of the new clause and congratulate my right hon. Friend the Member for Aylesbury (Mr. Raison) on the able way in which he introduced the subject. My hon. Friend the Member for Northampton, North (Mr. Marlow) hit the nail on the head: if child benefit were still a tax allowance, there would be no argument about indexation. It would have been indexed along with all the other tax allowances. It is because the House decided, in order to reach those who do not pay tax, to change to child benefit—which should be called child credit—that we have this argument every time.
My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) pointed out the variations in the amounts that go in tax allowances and in child benefit. Perhaps it would help if we renamed child benefit "child credit" and presented the Treasury with the fixed amount

of credt for the majority, which converts automatically into a fixed tax credit, and attributed to the budget of the Department of Social Security only the sums that went to people who do not pay tax. That might help people to understand that child benefit is a hybrid measure. Our argument is not with my right hon. Friend the Secretary of State; it is whether the element that goes to those who pay tax should be a tax allowance while the rest is added to my right hon. Friend's budget.
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Another point that has not been made clear is that child benefit is a poverty-preventive benefit. It is all right to talk about those in need and about targeting the very needy, but the fact that child benefit is paid to many families—some with apparently high incomes—is poverty-preventive. In the London area in particular there are families on average incomes of about £11,000 a year who, because they have heavy mortgage payments, may have a net income that would bring them within family credit. Because they have a mortgage, however, they are not allowed to claim it. They may have a net income less than the maximum for income support, but, because they are in work, they are not allowed to claim income support. More than 60 per cent. of families with incomes of less than £15,000 a year benefit greatly from child benefit. I cannot believe that a benefit that is easy to understand, popular, fair, poverty-preventive, family-friendly, incentive-friendly, inflation-friendly and targeted to people who genuinely need it is withering on the vine in this way.
Denmark, which subjected child benefit to proof of need in 1977, removed the means test in 1987 largely because of the disincentive effect. Do not let us make the same mistake. I hope that all my hon. Friends will support the new clause.

Mr. Squire: It is no criticism of hon. Members on both sides of the Chamber to suggest that there is an element of predictability about the debate. I suspect that my speech will be subject to the same criticism. I echo those who have said how much we miss Sir Brandon Rhys Williams, who always made his mark in debates such as this. It is only fair to congratulate my hon. Friend the Member for Bexleyheath (Mr. Townsend) who, in a return to a subject in which he was notorious—if that is the right word—a few years ago, powerfully argued the case for uprating child benefit.
There are various issues that divide the Conservative party from time to time. We usually manage to find a compromise. On this issue, however, we seem to be having to struggle to find a compromise. Perhaps a tax allowance is the answer. Several of my hon. Friends have argued forcefully the case against the present system, essentially on the ground that they dislike the idea of people with higher incomes receiving the benefit. It does not seem to matter that only 5 per cent. of taxpayers pay the higher rate. It does not even seem to matter that, as we know from last year's figures, 60 per cent. of child benefit goes to those earning less than £15,000 per annum, which I do not necessarily regard as a high income. Presumably, my hon. Friends would support that take-up; we have not reached 60 per cent. take-up of family credit. In considering the direction of benefits, my hon. Friends who object to the uprating of child benefit should recognise that it reaches the poorest, even if it also reaches the richest.
More than one of my hon. Friends said how difficult it was for their wives, who seem to be forced to go along to claim child benefit. I realised that child benefit was a universal benefit, but I had no idea that it was compulsory. Clearly, things have advanced somewhat, and my hon. Friends' wives are being dragged, kicking and screaming, to the post office to claim the benefit—a horrible thought. They do not have to claim child benefit and, more seriously, if that is their concern we should change the arrangements through the tax system, not by messing around with the benefit system.
For reasons that some of my colleagues have advanced, child benefit remains the most effective way of tackling family poverty. With a take-up of about 98 per cent., it is the only income that many women receive in their own right. Most important—this point has not been stressed in the debate—it is worth the same, whether one is in or out of work. That means that, over the next decade, when we will wish to encourage many more people back into work, it will not have the negative effects of the poverty-employment trap whereby people lose money simply by coming off benefits, compared with what they might earn in employment.
There is a danger of family credit being viewed as a panacea. I unreservedly welcome the campaign that the Government have just announced. I wish to see a higher take-up. But that cannot solve the problem. We must welcome any reduction in the 250,000 families who are estimated to be eligible for family credit but are not currently receiving it. In their wildest, most optimistic moments, my right hon. Friend the Minister and his colleagues do not imagine that the take-up will remotely approach the present take-up for child benefit. Every family that is not receiving that benefit will lose out under a system of increasing family credit only.
An article in The Times of 25 March suggested, among other things, that the Government were considering stopping the payment of child benefit to better-off working mothers. I am the last person to suggest that The Times is invariably a paper of record. I hope that, in this case, the Ministers have been wrongly quoted. In the relief of poverty, particularly for single mothers, child benefit will be as critical in the 1990s as it has been during the 1980s. In the United States, an almost permanent under-class was created because of an almost total reliance on means-tested benefits. We want to avoid that. If we want to encourage people back to work, we must use the available weapons, and there is no better weapon than child benefit.
We talk a lot about the value of the family, but surely it should also have some cost to society and to the Government. It is not a phrase that should be trotted out when we want to say something about the family, but not backed up in any way by money. The intellectual argument for continuing to freeze child benefit is, presumably, that is should ultimately disappear or become relatively irrelevant. There is an intellectual argument for doing away with it. There is an intellectual argument for the case put forward by my hon. Friends who agree with me. There is no intellectual argument for freezing it as it is at present.
The first aims of any benefit system are to make receipt more certain and future escape from poverty more likely. That is the power of child benefit. It does that at present. That is why it is necessary and why I hope that hon. Members will support new clause 2.

Mr. Moore: I will try to move at a reasonable pace, because I appreciate that the House is anxious to move on. An awful lot of points have been made and I should like to address the three inter-related themes or sets of arguments that I have detected. The first surrounds those who misunderstand—some genuinely and some wilfully—the history and the purpose of child benefit. Then there is a set of arguments surrounding those—of course they had to be among the Opposition—who want to use the Government's decision this year to pervert the truth of the Government's outstanding record and their commitment to the family. The third strand of the debate surrounds those who, with their deep and long commitment to helping families with children, are worried that the present judicious mix of child benefit, the new income support and family credit structure may be a less effective way of targeting help than through higher universal child benefit. I shall try briefly to address those three arguments.
It is important to remind the House of the history, and, as the hon. Member for Birkenhead (Mr. Field) said, of what we are debating. We are debating a 1975 statute and I, as Secretary of State, have a beholden duty to the House and to the country to seek to put it into effect. I shall briefly discuss what it replaces. It has been a constant theme in the debate on child tax allowances and family allowances. It is also critical to remind hon. Members about what we never sought it to be.
My right hon. Friend the Member for Aylesbury (Mr. Raison), whose speeches I always enjoy, indelicately said that child benefit was introduced by Pitt and dropped out for a period during the 19th century. Pitt introduced CTAs in 1799, and they dropped out in 1805, not to reappear again until 1909. Ninety four out of 100 years is more than just a period. My right hon Friend legitimately asked us to go back to the beginning of the debate on child benefit. It is essential to do so. It lies at the back of the puzzlement of the hon. Member for Livingston (Mr. Cook). He continues to say that questions have not been answered about the nature and role of it.
I remind the House of the agreed basis upon which I, as Secretary of State, seek to put the arguments behind the introduction of child benefit. I will quote from the late Alec Jones in the debate in 1975, and I will also quote Mrs. Castle. She made it absolutely clear that the Social Security Act 1975 laid down
formal provisions for annual review of benefits paid under that Act and requires uprating of those benefits in line with earnings or prices as appropriate. We do not propose that there should be anything similar for child benefit because it is a totally different kind of benefit, fulfilling a different purpose.
In the first place it is a new kind of benefit—a hybrid, which amalgamates a social security benefit with a tax allowance. In the second place, most of the people receiving it will be people at work.
She went on to state:
It will be raised from time to time in the light of inflation and other developments. But just as neither family allowances nor child tax allowances are subject to the rigid pattern of upratings that has been evolved for social security benefits nor will their successor benefit be."—[Official Report, 13 May 1975, c. 330–400.]
The position was made clear. At the conclusion of the debate, after our late hon. Friend, Sir Brandon Rhys Williams sought to intervene, Mrs. Castle went on to say:
There is a difference between routine national insurance benefits and this new benefit. Indexation of the child benefit is inappropriate. National insurance benefits are major means of support when earning capacity is interrupted, but the chtld benefit is a tax-free supplement to families whose major


source of income is earnings. Clearly maintenance benefits must be capable of moving automatically in line with changes in the cost of living. The child benefit is in a different category."—[Official Report, 7 July 1975; Vol. 895, c. 238.] She went on precisely to describe what her statutory duty was, which is the duty that I seek to carry out.
That is the background to the history of the introduction. What did it replace? My hon. Friend the Member for Broxstowe (Mr. Lester), the hon. and learned Member for Fife, North-East (Mr. Campbell), my right hon. Friend the Member for Aylesbury and my hon. Friend the Member for Lewes (Mr. Rathbone) said that, if it were a tax allowance, it would be inconceivable that it would not be annually increased. That is not what happened in practice. During the longest clear period straddling major parties from 1946 to 1970, child tax allowances went up, not 25 times in 25 years, but five times. Family allowance rose four times. There was no increase between 1963 and 1968. My right hon. and hon. Friends should take more pride in the fact that in eight out of 10 years since 1979 we have increased child benefit. However, no Governments have ever sought to suggest that child benefit reflects the cost of a child.
I hope that the hon. Member for Livingston will state the Opposition's view on this clearly. The hon. Member for Birkenhead has a consistent and coherent view and he has argued genuinely that child benefit should be much higher than it is now. He repeated his arguments tonight. There is a consistency in his arguments and their inter-relationship with the rest of the relief system. However, I have great difficulty understanding what the hon. Member for Livingston believes.
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I want to refer to an excellent interview in "Poverty" magazine which appeared in autumn 1987. In that article the hon. Member for Livingston was asked about the taxation of child benefit. He said:
At some future date, it may or may not be appropriate to tax child benefit … there is no case for taxing it until you get to a level which actually matches the cost of a child and we are a long way from that.
On 18 January, the hon. Member for Livingston said that
At a time when it reflects one third of that cost"—
the cost, he said, of looking after a child—
it appears utterly ludicrous to suggest that we lower its value by another quarter."—[Official Report, 18 January 1989; Vol. 145, c. 352.]
Later in that debate, he changed that from one third to a quarter. We cannot debate different levels in that way. What is the official Opposition's position? If the hon. Member for Birkenhead is voicing the Labour party view or if that view is truly expressed by the hon. Member for Livingston, there will be an additional current expenditure cost of £9 billion to raise child benefit by tripling it and of £13·5 billion to raise it by quadrupling it. [Interruption.] The hon. Member for Livingston is interjecting now gently and in an amusing way. I want to remind him that earlier today he said:
Child benefit should be a stable constant support for the expense of children.
The Opposition cannot have it both ways. It is either a supplement based on the history of child benefit which we all recognise or, as the hon. Member for Birkenhead has said, if it is more than a supplement what extra expenditure

—substantive expenditure as opposed to making indexation permanent—would the hon. Member for Livingston desire?
My hon. Friends the Members for Lewisham, West (Mr. Maples) and for Norfolk, South-West (Mrs. Shephard), in their excellent speeches, both questioned my statutory duty. I do not have the choice of looking at child benefit in isolation. I must rightly consider the relationship between child benefit and the economic and social patterns in our country. I want to remind the House of what has happened to the average male wage earner. I accept the limitations of considering him, but we have income support systems and family credit for people below the average wage level. The take home pay of the average male wage earner in 1987–88 rose per week by £18·86. To January 1989, the latest clear figures that I have to show the latest comparisons, the average male wage earner's increment has gone up by £20 per week. That is the pattern against which I must judge child benefit among other forms of help and assistance for families with children. I will not belabour the House with the pattern of change over the past 10 years which is equally relevant and would be equally successful.

Mr. Lester: When my right hon. Friend quotes those increases in net income, should he not also put against that the increase in net mortgage payments? We are really talking about the net disposable income after paying for accommodation rather than net take-home pay.

Mr. Moore: My hon. Friend the Member for Lewisham, West made those points clearly. I am not suggesting that other features have not occurred. When I try to make judgments, I must take into account the relevant factors as I am statutorily bound to do, as the hon. Member for Birkenhead constantly reminds me.

Mr. Robin Cook: It is perfectly proper for the Secretary of State to take account of those matters in reaching his decision on whether to uprate child benefit. However, he will be aware that the same figures about growth and take-home pay will be before the Chancellor of the Exchequer when he makes his decision about the married man's tax allowance. Why, over the past two years when he was confronted with those figures, did the Chancellor of the Exchequer think it appropriate to increase the married man's tax allowance, but the Secretary of State for Social Security thought it inappropriate to raise child benefit? Why should it be right to recognise the increased costs of sustaining a wife, but wrong to recognise the increased costs of sustaining a child?

Mr. Moore: The hon. Gentleman seems not to have listened to what I have been saying for the past five minutes. I have tried to show that it is impossible to compare the nature of child benefit with the whole of the tax and benefits system which is regarded as a fundamental feature of the way in which families should be supported. We must consider the way in which a family has seen its net benefits increase. For example, with a reduction in real terms in the overall tax level, the married man's allowance changes have not had quite the significance that the surface figures might suggest. Beyond that, we must take account of the relevant position of the family—its actual net disposable income. In that respect, I will not just consider average male earnings.
If we consider those on half average income, it is clear that over the past decade their net take home pay has risen by 25 per cent. That is not a bad comparison with the 4·2 per cent. it rose under Labour. We must compare those huge increases in net disposable income with this debate about a potential 45p increase for those who would benefit from entitlement.
My next point relates to the character of this debate. Some Opposition Members have sought to focus on an attempt to pervert the truth of the Government's astonishingly successful record in trying to improve the overall position of families with children. My hon. Friend the Member for Chelmsford (Mr. Burns) made a valid point about that. He reminded the House—which should not need reminding—of the relevant records over the past decade in comparison with the Labour Government's period of office. We must remember that family support is not simply child benefit.
The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) made an emotional speech and I do not deny that emotion exists in these areas. However, he is trapped in the belief that child benefit is the only support structure for families with children.

Dame Elaine Kellett-Bowman: I t is for women.

Mr. Moore: With respect to my hon. Friend, it is not the only benefit which goes to women. The same applies, by statute, to family credit. There is similarly an option with income support.
We must consider the support structure provided by this Government over the past decade for families with children. There has been a staggering 27·3 per cent. increase in real terms in that respect in comparison with a reduction during the Labour Government's period of office of 7 per cent. The challenge by the hon. Member for Derby, South (Mrs. Beckett) was wrong. I draw her attention to the precise figures which have already appeared in Hansard. Unfortunately, I do not have the references for them at the moment.

Mr. Marlow: I am afraid that my right hon. Friend seems to be answering the questions that were put to him by producing a series of statistics which relate to a question which has not been put to him. Perhaps my right hon. Friend can strengthen his position by telling the House how much more generous we are in this country with our support for children than our European partners?

Mr. Moore: I could, but I was trying to make progress.
Perhaps I can correct the misapprehension created by the incorrect figures quoted by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). I am sure that he did not mean to create that impression. He quite rightly congratulated us on our help for one-parent families. For a two-parent family with one child aged under two, the United Kingdom stands ahead of every other member state in its child benefit payments. For a two-parent family with two children aged under six, the United Kingdom ranks third behind Belgium and Luxembourg. That is not a bad comparison. Perhaps the hon. Member for Derby, South would like me to pursue that point.
The relevant figures that I read out in regard to support for families with children are not due to increased unemployment. Neither unemployment benefit, supplementary benefit nor income support for the

unemployed is included. This is entirely consistent with the definition of "family", in the breakdown of expenditure by client group, that has appeared regularly in public expenditure White Papers over the past eight or nine years. For the benefit of the House, I repeat that that means one-parent benefit, family income supplement, family credit, child benefit or its equivalent, maternity grant and allowance, statutory maternity pay, supplementary benefit and housing benefit for lone parents, and additional personal tax allowance for lone parents. This touches in a very minor way on the elderly, because the figure includes benefits paid to lone parents and to people looking after elderly parents. In the data the two cannot be disaggregated, but the difference is likely to be very small indeed. It does not in any way deny the astonishing contrast in records of support for families with children.
However, it is astonishing, in detail, that the Opposition, as opposed to my right hon. and hon. Friends, can in any way question the specific in regard to child tax allowances, family allowances and family credit. I remind the House that the real value of child benefit has been higher throughout this Government's period of office than it was at any time during the Labour Administration, except when they increased it in their last month in office. I will not go into too much detail, because it might be quite painful to Opposition Members—[Interruption.] If the hon. Gentleman wants me to go into precise detail, I shall be only too delighted to do so.
I do not know how many Opposition Members who have not been here throughout the debate would like to be reminded of the situation. Clearly, some of them would. Well, I have plenty of time to do so. I might remind them, for example—[Interruption.] I can tell hon. Members who keep interrupting that I have lots more details of their appalling handling of government. For example, during the period 1976–77 to 1977–78, the equivalent of child benefit—family allowance—and in fact the whole of child tax allowances saw not just a reduction, in real terms, of £1.4 billion, but a cash reduction of nearly £300 million. That is the miserable record with which the Labour party thinks that it can challenge the Government.
Finally, I want to touch on areas that genuinely worry some of my right hon. and hon. Friends, who are concerned that the present mix of child benefit, the new income support system and family credit may be less effective in targeting help than simply increasing child benefit would be. First, I must remind my right hon. and hon. Friends that, as my hon. Friend the Member for Lewisham, West said, we have an entirely new structure. The hon. Member for Livingston, quite understandably, keeps trying to compare child benefit with family credit. In truth, it must be compared with the whole structure of income support and family credit. There, of course, we are talking about 1·4 million families in all, including only those currently in receipt of family credit, with nearly 3 million children. As my hon. Friend the Member for Broxbourne (Mrs. Rowe) said, none of those families benefit, in effect, from any increment in child benefit.
My right hon. Friend the Member for Aylesbury rightly asked why we did not use the new structure. That is precisely what has been done, last year and this year. The structure of new child premiums has enabled me, as Secretary of State, to give an additional £270 million to those specific families who have an entitlement but who would not see a direct benefit if I were simply to increase child benefit.
There was a great deal of debate about targeting. Our experience of targeting is not quite as difficult as right hon. and hon. Members seem to think. They seem to have forgotten the history—and I can give them only the data of the past pattern as opposed to the present position in regard to family credit. The hon. Member for Moray (Mrs. Ewing) seemed to think that targeting had failed. Our experience is that £9 of every £10 of means-tested benefit reaches those for whom it is intended. As my hon. Friend the Member for Lewisham, West said, the lone parents do not see it as demeaning. Indeed, they take up 97 per cent. of expenditure on their means-tested benefits.
As I said earlier, family credit goes to the mother. Contrary to what one or two hon. Members have said, all the research suggests that inhibition is caused not by the demeaning nature of means-testing, but by lack of knowledge of the character of family credit. As several right hon. and hon. Members have indicated, we are seeking to improve that knowledge.
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The House will be delighted to know that in the first week of the new take-up campaign the number of new claims—not repeat claims—has tripled to over 20,000. That is before we have gone into the major street campaign. I remind the House that in the first year of family credit—unlike the 17 or so years of family income supplement—expenditure take-up is going at 65 per cent. There has been a very sizeable increase, to £422 million, in the amount of money actually being spent on families with children.
Those who argue that targeting child benefit is an effective way of reaching people must be reminded that, as one or two of my hon. Friends have said, £1 billion of actual child benefit money goes to families earning more than £20,000 a year. We are discussing the current child benefit situation, a situation that continues.
Bearing in mind the 25 per cent. of families, with 3 million children, on income support and family credit that will benefit in no way at all from an increase in child benefit, one wonders why it is such an excellent illustration of targeting. That does not, of course, take into account the 2·25 million children in families earning £20,000 a year.
In urging the House to reject the new clause, I ask hon. Members to remember the flexibility that has contributed to the Government's outstanding record of support for families. That is a record that, between 1979 and 1985, has raised the living standards of lone parents by 10 per cent.; of couples with children by 9 per cent.; and, in contrast, of couples without children, and single people without children, by 6 per cent.
The record is clear. Our economic success allows me to help with a judicious mixture of universal child benefit and targeted help through income support and family credit. Our record suggests that it is in the interests of families that we retain the flexibility in the present statute, and I urge the House to reject the new clauses.

Mrs. Beckett: Clearly the House is in a mood to bring this most interesting debate to an end, and I shall seek to be extremely brief.
When child benefit was introduced, it was generally agreed that it was the most fair and effective way not only of giving support to families with children, but of giving

support particularly to the poorest families with children because it tended to reduce the poverty trap. Indeed, this is the view that prevailed as recently as two years ago and lay behind the assurance given in the Conservative manifesto at the last election. That assurance was given against the background of the existence of family credit, for example, which was already on the statute book, and today child benefit remains what it has always been—one of the most popular benefits, with the highest take-up and the most efficient administration.
It is far from clear what all its opponents are really saying. Some seem to imply that there should be no form of child support at all, that those who choose to have children should simply maintain them to the full, without any support from society as a whole. Other hon. Members appeared to suggest that that support, where it is paid, should go only to the poorest families.
The hon. Member for Lewisham, West (Mr. Maples) asked why a constituent of his, a single taxpayer, should pay tax to help to fund child benefit. I will give him two reasons. The first is that, because of injustice, the chances are extremely high that that young person benefited from the payment of child benefit, and it is only fair that he should return to the pool what he himself received. The second reason, which may have rather more appeal to the hon. Gentleman than justice, is self interest. If we do not encourage people to have children and give them a reasonable degree of financial and other support, there will be no one to pay for that young woman's pension when she retires, because that is how our social security system works.
If the Government believe that there should be no form of child support, with due deference to my hon. Friend the Member for Birkenhead (Mr. Field) and remarks about the present duty on the Secretary of State, they have a duty to tell us that as soon as possible so that the parents of 12 million children know precisely where they stand. It is only right to put on record our belief that that signal would be as profound as it would be depressing. Moreover, it would be a signal not just of indifference but almost of hostility towards families.
The general approach has been that support should come, but only to the poorest. I remind Conservative Members who advocated that view what that might mean. As usual, they talked only of wealthy families who now receive child benefit and as if a means-tested system would be a reasonably generous one. Under the means-tested system of family credit, all help with rent or rate rebate is withdrawn at a gross income of £90 a week. If that model were to be followed for child benefit, no child support would be paid to any family with an income of more than £5,000 a year. That would be targeting all right. That would be means testing, but it would be means testing in the mould of that already followed by the Government.
The hon. Member for Lewisham, West said that benefit should be withdrawn at £9,000 or perhaps £10,000. If that is the policy of his party, let it be known, published and publicised as soon as possible. Let every family with an income of over £9,000 a year know that it will cease to receive any form of child support.
If child benefit were abolished and the money saved were put to fund a cut in the rate of tax, no two-child family with an income of less than £28,000 would be better off. That is the scale of the assistance which hon. Members seek to withdraw from families.
Hon. Gentlemen who argue for a means-tested benefit should look not only at those examples, but more widely at their Government's approach to the social security system. They should consider how the child addition to unemployment benefit was first frozen and then, when it declined in value, abolished; and how the number of those allowed free meals has declined—not those who need them but those who are permitted to take them.
There has never been an answer, not even in this debate, to the question, put over and over again, why the Government put into action policies which recognise the increase in the cost of maintaining a wife, yet apparently see a decrease in the cost of maintaining a child.
Most of all, hon. Gentlemen who argue that child benefit should be means tested should have learnt from the examples of this year. The money saved by freezing child benefit did not, even on the most generous interpretation—the Government's own—go to families in greatest need. A third of it went to families who were least well off and the rest went into the Treasury's coffers, despite the fact that those on the lowest incomes, whether on income support or family credit, are still worse off from the Government's net changes to the social security system. The call for a means-tested child benefit is a call for a mean child benefit indeed.
One other possibility that has been mentioned is the return of the child tax allowance. I pay deference to my hon. Friend the Member for Birkenhead and to the hon. Member for Northampton, North (Mr. Marlow), who appeared reluctantly drawn in this direction because of Government policy on child benefit. I cannot support a proposal which means that those who pay no tax get no benefit and help with the costs of raising a child or a proposal that, instead of giving the same to the Duchess of Westminster as every other mother, gives her substantially more. That proposition should not commend itself to the House.
Many in this House and outside it fear that the true source of the hostility to child benefit is the wish to see a cut in public expenditure. That may be unfair to Tory Members who support the Government on this matter and genuinely believe, however mistakenly, that they are supporting a policy to give help to those in most need. Even if that is hope triumphing over experience, hon. Gentlemen for whom that is genuinely the cause of their approach should look at the weight of the argument and the experience which goes against their belief. If they cannot vote with us tonight, they should at least abstain. If they are honest in their concern for children, particularly for children in the poorest families, and if they do not vote with us tonight, they will live to regret it; but the children will regret it most of all.
I believe that it would be for the convenience of the House if I were to withdraw new clause I so that we might vote on new clause 2. I shall ask leave to withdraw new clause 1.

Mr. Raison: With the leave of the House, may I say that my right hon. Friend the Secretary of State for Social Services has spoken with his usual courtesy. I do not believe that he has convinced those who have listened carefully that it can possibly make sense for the Government to allow child benefit and support for children to fade away at the same time as they continue with tax relief for earning pensioners, on mortgages and various forms of income tax, and now tax relief for those

over 60 who take out private health insurance—all on a completely universal, indiscriminate, non-targeted basis. Therefore, I urge the House to support new clause 2.

Mrs. Beckett: I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 2

SOCIAL SECURITY ACT 1986

`In section 63(3) of the Social Security Act 1986 for "(c) or (d) above" there shall be substituted "(c), (d) or, in any Order having effect on or after 1st April 1990, (f), (child benefit), above".'—[Mr. Raison.]

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

The House divided: Ayes 194, Noes 294.

Division No. 171]
[7.56 pm


AYES


Abbott, Ms Diane
Evans, John (St Helens N)


Adams, Allen (Paisley N)
Ewing, Mrs Margaret (Moray)


Anderson, Donald
Faulds, Andrew


Archer, Rt Hon Peter
Fearn, Ronald


Armstrong, Hilary
Field, Frank (Birkenhead)


Ashley, Rt Hon Jack
Fields, Terry (L'pool B G'n)


Ashton, Joe
Flannery, Martin


Banks, Tony (Newham NW)
Flynn, Paul


Barnes, Harry (Derbyshire NE)
Foot, Rt Hon Michael


Barnes, Mrs Rosie (Greenwich)
Foster, Derek


Barron, Kevin
Foulkes, George


Battle, John
Fraser, John


Beckett, Margaret
Fyfe, Maria


Beith, A. J.
Galbraith, Sam


Benn, Rt Hon Tony
Galloway, George


Bennett, A. F. (D'nt'n &amp; R'dish)
Garrett, John (Norwich South)


Benyon, W.
Garrett, Ted (Wallsend)


Bermingham, Gerald
Gilmour, Rt Hon Sir Ian


Bidwell, Sydney
Gordon, Mildred


Blair, Tony
Graham, Thomas


Blunkett, David
Griffiths, Nigel (Edinburgh S)


Boyes, Roland
Grocott, Bruce


Bradley, Keith
Hardy, Peter


Bray, Dr Jeremy
Hattersley, Rt Hon Roy


Brown, Gordon (D'mline E)
Haynes, Frank


Brown, Ron (Edinburgh Leith)
Healey, Rt Hon Denis


Buchan, Norman
Henderson, Doug


Buckley, George J.
Hicks, Robert (Cornwall SE)


Callaghan, Jim
Hinchliffe, David


Campbell, Menzies (Fife NE)
Hogg, N. (C'nauld &amp; Kilsyth)


Campbell, Ron (Blyth Valley)
Holland, Stuart


Campbell-Savours, D. N.
Home Robertson, John


Carlile, Alex (Mont'g)
Hood, Jimmy


Clark, Dr David (S Shields)
Howell, Rt Hon D. (S'heath)


Clarke, Tom (Monklands W)
Howells, Dr. Kim (Pontypridd)


Clwyd, Mrs Ann
Hoyle, Doug


Cohen, Harry
Hughes, John (Coventry NE)


Cook, Robin (Livingston)
Hughes, Robert (Aberdeen N)


Corbett, Robin
Hughes, Roy (Newport E)


Corbyn, Jeremy
Hughes, Sean (Knowsley S)


Critchley, Julian
Hughes, Simon (Southwark)


Crowther, Stan
Illsley, Eric


Cryer, Bob
Ingram, Adam


Cummings, John
Janner, Greville


Cunningham, Dr John
Johnston, Sir Russell


Dalyell, Tam
Kaufman, Rt Hon Gerald


Darling, Alistair
Kellett-Bowman, Dame Elaine


Davies, Rt Hon Denzil (Llanelli)
Kennedy, Charles


Davis, Terry (B'ham Hodge H'l)
Kilfedder, James


Dixon, Don
Kinnock, Rt Hon Neil


Dobson, Frank
Kirkwood, Archy


Doran, Frank
Knox, David


Duffy, A. E. P.
Lamond, James


Dunwoody, Hon Mrs Gwyneth
Leighton, Ron


Dykes, Hugh
Lester, Jim (Broxtowe)


Eadie, Alexander
Lestor, Joan (Eccles)






Lewis, Terry
Reid, Dr John


Lofthouse, Geoffrey
Richardson, Jo


Loyden, Eddie
Robertson, George


McAllion, John
Robinson, Geoffrey


McAvoy, Thomas
Rogers, Allan


McCrindle, Robert
Rooker, Jeff


Macdonald, Calum A.
Ross, Ernie (Dundee W)


McKay, Allen (Barnsley West)
Ruddock, Joan


McKelvey, William
Sedgemore, Brian


McLeish, Henry
Shaw, Sir Giles (Pudsey)


Maclennan, Robert
Sheerman, Barry


Madden, Max
Sheldon, Rt Hon Robert


Madel, David
Skinner, Dennis


Mahon, Mrs Alice
Smith, Andrew (Oxford E)


Marek, Dr John
Smith, C. (Isl'ton &amp; F'bury)


Marlow, Tony
Smyth, Rev Martin (Belfast S)


Marshall, David (Shettleston)
Snape, Peter


Martlew, Eric
Soley, Clive


Maxton, John
Spearing, Nigel


Meale, Alan
Squire, Robin


Meyer, Sir Anthony
Steinberg, Gerry


Michie, Bill (Sheffield Heeley)
Strang, Gavin


Michie, Mrs Ray (Arg'l &amp; Bute)
Straw, Jack


Mitchell, Austin (G't Grimsby)
Taylor, Matthew (Truro)


Moonie, Dr Lewis
Thompson, Jack (Wansbeck)


Morgan, Rhodri
Townsend, Cyril D. (B'heath)


Morley, Elliott
Wall, Pat


Morris, Rt Hon A. (W'shawe)
Wallace, James


Morris, Rt Hon J. (Aberavon)
Walters, Sir Dennis


Murphy, Paul
Wareing, Robert N.


Nellist, Dave
Welsh, Andrew (Angus E)


Oakes, Rt Hon Gordon
Wigley, Dafydd


O'Brien, William
Williams, Rt Hon Alan


Parry, Robert
Wilson, Brian


Patchett, Terry
Winnick, David


Pendry, Tom
Wise, Mrs Audrey


Pike, Peter L.
Wray, Jimmy


Radice, Giles
Young, David (Bolton SE)


Raison, Rt Hon Timothy
Young, Sir George (Acton)


Randall, Stuart



Rathbone, Tim
Tellers for the Ayes:


Redmond, Martin
Mrs. Llin Golding and


Rees, Rt Hon Merlyn
Mr. Ray Powell.


NOES


Adley, Robert
Brown, Michael (Brigg &amp; amp;Cl't's)


Aitken, Jonathan
Browne, John (Winchester)


Alexander, Richard
Bruce, Ian (Dorset South)


Alison, Rt Hon Michael
Budgen, Nicholas


Allason, Rupert
Burns, Simon


Amery, Rt Hon Julian
Burt, Alistair


Amess, David
Butcher, John


Amos, Alan
Butler, Chris


Arbuthnot, James
Butterfill, John


Arnold, Jacques (Gravesham)
Carlisle, John, (Luton N)


Arnold, Tom (Hazel Grove)
Carlisle, Kenneth (Lincoln)


Ashby, David
Carrington, Matthew


Aspinwall, Jack
Carttiss, Michael


Baker, Rt Hon K. (Mole Valley)
Cash, William


Baker, Nicholas (Dorset N)
Channon, Rt Hon Paul


Batiste, Spencer
Chapman, Sydney


Bellingham, Henry
Clark, Hon Alan (Plym'th S'n)


Bendall, Vivian
Clark, Dr Michael (Rochford)


Bennett, Nicholas (Pembroke)
Clark, Sir W. (Croydon S)


Bevan, David Gilroy
Clarke, Rt Hon K. (Rushcliffe)


Bitten, Rt Hon John
Colvin, Michael


Blackburn, Dr John G.
Conway, Derek


Blaker, Rt Hon Sir Peter
Coombs, Anthony (Wyre F'rest)


Body, Sir Richard
Coombs, Simon (Swindon)


Bonsor, Sir Nicholas
Cope, Rt Hon John


Boscawen, Hon Robert
Couchman, James


Boswell, Tim
Cran, James


Bottomley, Peter
Currie, Mrs Edwina


Bottomley, Mrs Virginia
Curry, David


Boyson, Rt Hon Dr Sir Rhodes
Davies, Q. (Stamf'd &amp; Spald'g)


Braine, Rt Hon Sir Bernard
Davis, David (Boothferry)


Brandon-Bravo, Martin
Day, Stephen


Brazier, Julian
Devlin, Tim


Bright, Graham
Dickens, Geoffrey


Brooke, Rt Hon Peter
Dicks, Terry





Dorrell, Stephen
Latham, Michael


Douglas-Hamilton, Lord James
Lawrence, Ivan


Dover, Den
Lawson, Rt Hon Nigel


Dunn, Bob
Lee, John (Pendle)


Evans, David (Welwyn Hatf'd)
Leigh, Edward (Gainsbor'gh)


Evennett, David
Lennox-Boyd, Hon Mark


Fallon, Michael
Lightbown, David


Favell, Tony
Lilley, Peter


Fenner, Dame Peggy
Lloyd, Sir Ian (Havant)


Field, Barry (Isle of Wight)
Lloyd, Peter (Fareham)


Finsberg, Sir Geoffrey
Lord, Michael


Fishburn, John Dudley
Luce, Rt Hon Richard


Forman, Nigel
Lyell, Sir Nicholas


Forsyth, Michael (Stirling)
MacKay, Andrew (E Berkshire)


Forth, Eric
Maclean, David


Fowler, Rt Hon Norman
McLoughlin, Patrick


Fox, Sir Marcus
McNair-Wilson, Sir Michael


Franks, Cecil
McNair-Wilson, P. (New Forest)


Freeman, Roger
Major, Rt Hon John


French, Douglas
Malins, Humfrey


Fry, Peter
Mans, Keith


Gale, Roger
Maples, John


Gill, Christopher
Marland, Paul


Glyn, Dr Alan
Marshall, John (Hendon S)


Goodlad, Alastair
Marshall, Michael (Arundel)


Goodson-Wickes, Dr Charles
Martin, David (Portsmouth S)


Gorman, Mrs Teresa
Maude, Hon Francis


Gorst, John
Mawhinney, Dr Brian


Gow, Ian
Maxwell-Hyslop, Robin


Grant, Sir Anthony (CambsSW)
Mellor, David


Greenway, John (Ryedale)
Miller. Sir Hal


Gregory, Conal
Miscampbell, Norman


Griffiths, Peter (Portsmouth N)
Mitchell, Andrew (Gedling)


Grist, Ian
Mitchell, Sir David


Ground, Patrick
Moate, Roger


Grylls, Michael
Monro, Sir Hector


Gummer, Rt Hon John Selwyn
Montgomery, Sir Fergus


Hague, William
Moore, Rt Hon John


Hamilton, Hon Archie (Epsom)
Morrison, Rt Hon P (Chester)


Hamilton, Neil (Tatton)
Moss, Malcolm


Hampson, Dr Keith
Moynihan, Hon Colin


Hanley, Jeremy
Mudd, David


Hannam,John
Neale, Gerrard


Hargreaves, A. (B'ham H'll Gr')
Needham, Richard


Hargreaves, Ken (Hyndburn)
Nelson, Anthony


Harris, David
Neubert, Michael


Hawkins, Christopher
Newton, Rt Hon Tony


Hayes, Jerry
Nicholls, Patrick


Hayward, Robert
Nicholson, David (Taunton)


Heathcoat-Amory, David
Nicholson, Emma (Devon West)


Heddle, John
Norris, Steve


Heseltine, Rt Hon Michael
Onslow, Rt Hon Cranley


Hicks, Mrs Maureen (Wolv' NE)
Oppenheim, Phillip


Higgins, Rt Hon Terence L.
Page, Richard


Hill, James
Paice, James


Hind, Kenneth
Patnick, Irvine


Hogg, Hon Douglas (Gr'th'm)
Patten, Chris (Bath)


Holt, Richard
Patten, John (Oxford W)


Hordern, Sir Peter
Pattie, Rt Hon Sir Geoffrey


Howard, Michael
Pawsey, James


Howarth, Alan (Strat'd-on-A)
Porter, Barry (Wirral S)


Howarth, G. (Cannock &amp; B'wd)
Porter, David (Waveney)


Howell, Ralph (North Norfolk)
Portillo, Michael


Hughes, Robert G. (Harrow W)
Powell, William (Corby)


Hunt, David (Wirral W)
Price, Sir David


Hunter, Andrew
Raffan, Keith


Hurd, Rt Hon Douglas
Redwood, John


Irvine, Michael
Rhodes James, Robert


Jack, Michael
Riddick, Graham


Janman, Tim
Ridley, Rt Hon Nicholas


Jones, Robert B (Herts W)
Ridsdale, Sir Julian


Key, Robert
Rifkind, Rt Hon Malcolm


King, Roger (B'ham N'thfield)
Roberts, Wyn (Conwy)


Kirkhope, Timothy
Roe, Mrs Marion


Knapman, Roger
Rossi, Sir Hugh


Knight, Greg (Derby North)
Rost, Peter


Knight, Dame Jill (Edgbaston)
Rowe, Andrew


Knowles, Michael
Rumbold, Mrs Angela


Lamont, Rt Hon Norman
Ryder, Richard


Lang, Ian
Sackville, Hon Tom






Sainsbury, Hon Tim
Thompson, D. (Calder Valley)


Scott, Nicholas
Thompson, Patrick (Norwich N)


Shaw, David (Dover)
Thornton, Malcolm


Shaw, Sir Michael (Scarb')
Thurnham, Peter


Shelton, Sir William
Townend, John (Bridlington)


Shephard, Mrs G. (Norfolk SW)
Tracey, Richard


Shepherd, Colin (Hereford)
Tredinnick, David


Shepherd, Richard (Aldridge)
Trippier, David


Shersby, Michael
Twinn, Dr Ian


Sims, Roger
Vaughan, Sir Gerard


Skeet, Sir Trevor
Viggers, Peter


Smith, Sir Dudley (Warwick)
Waddington, Rt Hon David


Smith, Tim (Beaconsfield)
Wakeham, Rt Hon John


Soames, Hon Nicholas
Waldegrave, Hon William


Speed, Keith
Walden, George


Speller, Tony
Walker, Bill (T'side North)


Spicer, Sir Jim (Dorset W)
Walker, Rt Hon P. (W'cester)


Spicer, Michael (S Worcs)
Waller, Gary


Stanbrook, Ivor
Ward, John


Stanley, Rt Hon Sir John
Wardle, Charles (Bexhill)


Steen, Anthony
Warren, Kenneth


Stern, Michael
Watts, John


Stevens, Lewis
Wheeler, John


Stewart, Allan (Eastwood)
Whitney, Ray


Stewart, Andy (Sherwood)
Widdecombe, Ann


Stewart, Rt Hon Ian (Herts N)
Wilshire, David


Stokes, Sir John
Wolfson, Mark


Stradling Thomas, Sir John
Wood, Timothy


Sumberg, David
Woodcock, Mike


Summerson, Hugo
Yeo, Tim


Tapsell, Sir Peter



Taylor, John M (Solihull)
Tellers for the Noes:


Taylor, Teddy (S'end E)
Mr. Tristan Garel-Jones and


Thatcher, Rt Hon Margaret
Mr. Tony Durant.

Question accordingly negatived.

New Clause 5

INCOME SUPPORT TRANSITIONAL ADDITIONS

'In regulation 14 (A) of the Income Support (Transitional) Regulations 1987, after the word "claimant" there shall be inserted the words "or an up-rating order under section 63 of the Social Security Act 1986 comes into force".'.—[Mrs. Beckett.]

Brought up, and read the First time.

Motion made, and Question proposed, That the clause be read a Second time.—[Mrs. Beckett.]

Mr. Robin Cook: A fortnight ago the House debated a motion on a Labour Supply day calling for the uprating of all claimants' benefits. That motion was specifically addressed to those people who, this April, found that they had not an extra penny in their benefit of whom there were 570,000 pensioners and other claimants. The reason why they found that they did not get an extra penny in their pension or their benefit was that they were locked into the politely termed "transitional protection", which might be more accurately described as a deep freeze.
A fortnight ago I attempted to get the House to agree to extend the uprating to embrace those 570,000 people. I failed and tonight I do not propose to reopen the case for uprating benefits for all 570,000 people in the current year. I want to address the mind of the House to next year's uprating. Virtually none of those 570,000 will get the full uprating next year either. All of them will find that next year's uprating, whatever it might be, will be reduced by the amount that they currently receive in transitional protection. A number will receive nothing in next's year's uprating, again because their transitional protection will exceed the total amount of next year's uprating. We have an idea about how many of such people there might be. In March the Government replied to a parliamentary question in which they put the number of people in that

group at 140,000. That slightly understates the number who, next April, will receive nothing, because that 140,000 is measured at the mid-point of the year. At the beginning of the year there will be rather more. It might be helpful if the Parliamentary Under-Secretary of State could tell the House how many there will be in April who will not receive a penny in next year's uprating.
Even though the figure affected turned out to he only 140,000, that is bad enough. We are talking about a large population who will not have received any increase in 1988, who have received no increase in 1989 and who are, under the existing rules, fated to receive no increase next year.
For some of those affected the story does not stop next year. Some who are receiving rather more than £2 or £3 in transitional protection can expect to get no increase for years to come. I have received a letter from a pensioner from Christchurch who now knows that he will not receive an increase in uprating until 1992. As he says:
Like many others I am below the breadline and yet I face even worse conditions".
What makes that letter particularly moving is that that pensioner is 81. It must be an open question whether he will live to claim any increase in his benefits. I received a letter from a disabled woman in Putney who has worked out that she does not qualify for any uprating at present rates of inflation until 1994—four years from now. She says in her letter:
This just about finishes me.
She is registered disabled, but, by definition, all those 140,000 people experience some form of disability arid some form of chronic sickness. They are among the most vulnerable and the most frail people in Britain. After all, that is why they got the extra allowances that were abolished last year. Those allowances were to help them with the extra cost of laundry if they were incontinent, to help them with the extra cost of diet if they had special health needs for a particular diet or to help them with the extra cost of bathing if they required daily bathing. Such people are still disabled, they are still chronically sick arid they still have the same health needs, but they are no longer able to afford to do anything to meet those needs.
So far the defence of the Government—the Parliamentary Under-Secretary has boldly and trenchantly made that defence on other occasions—is that to extend uprating to such people would be unfair to other claimants in identical circumstances who have claimed since April and who never got the allowances—therefore they never had the allowances to lose—and who are even worse off than those whose benefit was frozen last April. I concede that point to the Minister before he makes it. It is true that people who have come on to benefit since last April are getting even less than the people to whom I have referred. I am surprised, however, that Ministers are anxious to draw that to the attention of the House because what they are drawing attention to is how much lower benefits are as a result of the April cuts and how badly disabled people fare under the new system of benefits.
8.15 pm
There is one reason why I believe that the Government should distinguish in favour of claimants who were on benefit before last April and have found their benefit frozen since. The longer one has to subsist on social security income, the deeper one is likely to find oneself in poverty. By definition, all those who find themselves on transitional protection will have been on benefit for a


minimum of three years by next April—most of them for much longer. God knows, the real value of their benefit was little enough in April 1987, the last time they received any uprating. By next April their benefit will have been cut by one fifth in real terms. In the past two years it has already been cut by 12 per cent. It must be difficult for any of us in the House, necessarily and by definition receiving reasonably comfortable salaries, to imagine what a 12 per cent. or 20 per cent. cut means to people living at the margins of existence.
A single person on transitional protection—no increase this year and no increase next year—could be on an income of just under £50 a week. Where is there room for a cut of one fifth in real terms in that standard of living? Which of us gathered in this Chamber tonight could manage to achieve a cut of a fifth in such an income? Leaving aside the hardship that such a cut causes and the risks and the danger to the health of frail and disabled people, there is an appalling mental stress from having constantly to juggle to balance the budget.
I have with me a long letter from a lady from Lancashire, a pensioner, who has sought to express to me what life is like living on the fixed income on which she and her husband must subsist. That income has now not increased for two years. She says:
It is a day and night worry you cannot escape. You are isolated with it. It dominates your life. Nothing else matters (apart from other people's tragedies). If you wake in the night, it is your first thought and you cannot go back to sleep. I often have to get up at 4 am and 5 am as I cannot stay in bed. I have never told anyone this before … I have to try to keep my invalid husband happy, but I cannot keep such problems from him".
It is not just the financial hardship and not just the difficulty of making ends meet; it is the humiliation that accompanies the daily struggle of trying to make the budget stretch through the day that is so difficult.
The last of the letters to which I shall refer is from Abingdon, Oxfordshire. Many of the letters that I have received come from Conservative-held constituencies. This is not a problem that affects merely Labour constituencies; it also affects the constituents of Conservative Members. It is a matter of regret that, given the importance of this debate, there are so few Conservative Members present to represent their constituents who are so affected. The letter from Abingdon states:
this morning I have received through the post a demand for my electric bill or I will be cut off … I just cannot pay it out of the £26 I have left each week, I still have the water and the sewerage to come. I just cannot take any more. I have been up to the dustbins at Gateways and found half a pound of butter dated for 10 April"—
two days before the letter was sent to me—
and one or two rashers which will be my dinner today. Most days I can find six eggs if I am willing to get in the skip.
That is the reality of life on the breadline for a pensioner who finds that her pension is not only modest and meagre but has been cut, in real terms, since April 1987. Some pensioners will receive an increase of £2·50 by October. I welcome the fact that the Government will provide that increase to those on transitional protection. However, lest the Minister raise that matter in defence of the Government, I point out that the two letters to which I have referred are from pensioners much younger than 75

who will receive no extra help in October but will be stuck on a level of benefit that is not only meagre but is declining and will continue to decline as inflation rises.
Last Wednesday night, at a single sitting, I read more than 100 such letters that had been preserved for me by my office. I confess that I had not intended to read all of them and that I had prepared a standard reply, as that seemed the only way to deal with the large volume of letters I had received from pensioners since the publicity a fortnight ago about the forthcoming debate. However, having started reading, I found I could not stop and I read every single one of those 100 letters. By the time I had finished, I was left not in a state of anger at the situation but feeling deeply humble at the poverty that those who had written to me had to cope with. I also felt humbled by my inability, given the present majorities in this Parliament, to do anything material to assist them in their poverty. Many of them described heroic sacrifices that they had made in their lives. I particularly recall a letter from one widow who had nursed her disabled bed-ridden husband for 28 years. For the past 16 years he could not even speak. The reward she has received from society for that immense personal sacrifice and dedication is to be left with a frozen pension on which, she wrote to me, she was unable to afford cereals.
What comes from all those letters is a sense of bewilderment. People are bewildered as to how they can cope on a declining pension. They are also bewildered at how any Government or Minister with knowledge of their circumstances could choose to deny benefits to them. The letters are marked, too, by a bleak despair felt by those correspondents who now realise that next year, too, there will be no relief for them.
Let me acquit the present Ministers and the Department of Social Security of the responsibility for inventing the rules of transitional protection. They did not invent the rules—they inherited them from their predecessors, who were sensible enough to make good their escape before the reality hit the claimants. I do not blame the present generation of Ministers for the problem, but I will blame them if they do not act now to remedy the problem with which they must be as familiar as I am, because many of the letters I read last Wednesday were copies of letters addressed to the Secretary of State and the Minister of State. Therefore, it is for them, knowing the problem and the desperate extent of the poverty, to start tonight by giving these pensioners an assurance that their pensions will keep pace with inflation. They should tell the House that they accept the compelling evidence of poverty among those whose benefits were frozen last year and that, next year, the Government will do them the elementary justice of bringing them in from the cold.

Mr. Archy Kirkwood: I support the amendment for basically the same reasons put forward by the hon. Member for Livingston (Mr. Cook) in a measured speech that will repay careful study. The situation regarding pensioners is now fairly untenable. I have said before in this place that those of us who served on the 1986 Standing Committee that dealt with the legislation with which, essentially, we are now dealing—the Social Security Act 1986—predicted that the present situation would come about and that this House would have to return to debating the difficulties brought about by the 1986 Act. It is unreasonable to expect people who are affected by the withdrawal of transitional protection to


suffer an increase in costs of 12 per cent. this year, adding up to 20 per cent. next year, if they do not also enjoy a cash benefit increase in the uprating in April 1990.
The disabled are particularly badly hit. 1, too, receive letters, probably the same copy letters as referred to by the hon. Member for Livingston; letters addressed primarily to the Secretary of State and the Department. I suppose that as the Parliamentary Under-Secretary is the most junior Minister in the Social Security team, these letters are pushed to him to read. I do not want to suggest that the Minister of State or the Secretary of State are uncaring, but I presume that they have other things to do and that the Parliamentary Under-Secretary picks up all the time consuming jobs, amongst which must be the reading of some of these letters.
Ministers may be too busy to read some of these letters themselves. When did the Parliamentary Under-Secretary last take some time—an hour or so would be enough—to get the flavour of these letters, as reported by the hon. Member for Livingston? I know that Ministers have little spare time, but I would like the Parliamentary Under-Secretary to say when he was last able to find the time specifically to read some of the letters and to see what is being said about the financial hardships being occasioned by the withdrawal of transitional protection? Anyone who reads the letters cannot help but be moved.
The letters come from constituencies represented by sitting Conservative Members. They are pleas from the heart from genuine people, not from rabble-rousers or troublemakers. The information in the letters shows that the writers are deeply hurt and aggrieved. The level of morale and the psychological state exhibited by the writers of the letters shows that they feel that life is no longer worth living.

Mr. Tony Banks: I am grateful to the hon. Gentleman for raising this point, because I would like an answer, too. As my hon. Friend the Member for Livingston (Mr. Cook) made clear, these letters are also written to Conservative Members, and I would like to know why they do not appear to move those hon. Members. I remember that last week we had a debate on an SDP motion on the Health Service. The British Broadcasting Corporation's "Yesterday in Parliament" programme said that only one Labour Member of Parliament was present. In that case there was merely a debate taking place, whereas tonight we can actually vote, but how many Tony Members are present? The Minister, the Parliamentary Private Secretary and the Whip are here. Why are the Tory Members not moved by the experiences to which I have referred? I hope that the Tory Members, when they come back from the restaurants or wherever else they have gone, will be asked why they are not moved by the letters they must be receiving.

Mr. Kirkwood: What the hon. Gentleman has said illustrates and develops my point. I do Conservative Members the justice of saying that I believe that they probably ask for official ministerial replies on this subject. I get official ministerial replies as well. The civil servants put a slant on these matters, and this may be a trap into which the Parliamentary Under-Secretary is prone to fall as well. Prima facie, such replies can be fairly plausible, because they do not actually look at the question raised and because of the tone in which they are given. Therefore, even if Conservative Members are getting the Department

to respond to constituents, hon. Members are not looking behind what the ministerial replies are saying. A matching of the original requests with the replies from the Department shows that they are miles apart.
Compared with the circumstances of the claimants who write these letters, the Department is living in the financial stratosphere. The word-processed replies to these letters are glib and plausible to anybody who gives them a cursory glance but, when looked at in detail and against the background of the personal suffering shown by those who write in, they are completely inadequate. I am left humbled and frustrated, and feel completely helpless in dealing with the cases of constituents and others who complain about transitional protection.
8.30 pm
The Government cannot go on in this way because the problem will become more acute. The number of claimants may decrease as transitional protection fades away, but the problem for those caught in the trap will become worse and worse. For the foreseeable future, and at least for the rest of this Parliament, we shall return to this issue year in and year out. If the Government think that they can face down these representations, the Under-Secretary has a harder heart than I had credited him with.
The Government do not have huge sums of money, but help could be given in different ways. During the time between now and the Autumn Statement, when the upratings for next year will be made, will the Minister settle down and read some of these letters himself and cause some empirical research to be carried out into this subject? He has time and could get some experts to look at the suffering and hardship that this is causing. If he did that, it would become clear that there are ways to alleviate this problem, and they should be adopted.
As a direct result of studying the representations that have come from my constituency, I believe that the Under-Secretary has a moral duty, if not a legal duty, to take time now to advise people who are likely to lose, in cash terms, next April that transitional protection and the cash increase.
One of the most heartbreaking things this year is that people did not see this happening. I am not surprised by that, because even those who study these matters find them technically difficult to comprehend. Disabled people and others who have suffered this year, who did not expect to have to forgo a cash increase, must have found the problem even worse. Their budgets are carefully calculated under the established social security upratings system and in many cases they report to me that they did not expect to suffer this, to them, swingeing loss. Some do not know whether it will happen again next year. What, if anything, are the Government doing to prepare those who may be in that situation this year and, to a greater or lesser extent, next year? The Government have a duty to do something.
I have less to complain about than other hon. Members, who did not serve on the Committee examining the Social Security Act 1986. I underscore and support wholeheartedly the approach that the hon. Member for Livingston took. I do not complain as stridently as some other Opposition Members about social security issues or indulge in the trench warfare that sometimes breaks out. However, I can say to the Under-Secretary, hand on heart, that I think that this is a duff deal—unfair and unjust. In the next 12 months, something must be done to prevent such terrible cases happening again.

Mr. David Winnick: The new clause, so ably moved by my hon. Friend the Member for Livingston (Mr. Cook), deals with the poorest pensioners—those who count every penny and who live a life of poverty that should concern us all. I take the point made by my hon. Friend the Member for Newham, North-West (Mr. Banks) in his intervention in the speech of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). Across the Chamber on the Government Benches I can see only the junior Minister, the duty Whip, and the Minister's Parliamentary Private Secretary. There is no other Tory in the Chamber.

Mr. Michael Foot: There should be a senior Minister.

Mr. Winnick: My right hon. Friend is right. The Government are responsible for this legislation and in half an hour or less Tory Members will be voting in their hundreds for the Government's case.
I have received a number of letters from my constituents and I shall read out one or two of them, although I shall not identify the people concerned. One lady wrote:
I have had a reduction in my money. I am a widow living alone with no other income at all. I am 68 years old and have some difficulty in getting about, so, as you will understand, Sir I am in no position to relieve the situation myself.
She has received no increase in income. I took the matter up with the local DSS office. Like every other DSS office, it is bound of course by Government regulations. The manager said:
I realise that this will be a disappointing reply, but I hope that it explains the reasons behind the decision not to increase her benefit.
In all these cases, like other hon. Members, I take the matter up either locally or nationally. I think it only right and proper that I do so, although I have no illusions that my intervention in such cases can help to improve the situation locally. These are the rules, and the rules are decided by the Government.
Another constituent, a lady, wrote to me:
Last year, I was given a transitional allowance, bringing my pension to £47·86 with my late husband's and my own credits. I had a letter from the DHSS saying my extra money had to go down, and when I received my new book and look up the sum I was going to be paid"—
she found that she was to receive the same £47·86 that she had received before. She goes on:
Why are they allowed to do this? Food is going up all the time. I have to watch what I eat—no red meat, no other extras. There arc a lot of things I can't have because of my low income.
I make no apology for reading these letters. As Members of Parliament, our responsibility is to reflect here on the Floor of the House, not just through correspondence, the hardship and deprivation suffered by our constituents, the elderly among them.
Another letter, this time from a male pensioner, says:
I am 75 years of age. I have been on income support. I get a bit extra as a result of a work pension. There was about £3 a week. It was just over the limit. I live in my home and they have now stopped everything for me, apart from the pension.
He has a stomach difficulty and worse. He continues:
I have been down to the DSS and they have stopped all my allowances. I do not know how long I am going to carry on.
As the House will understand, in some cases constituents do not always write the most coherent letters, but they certainly make the valid points that we must and do understand.
I received a reply from the local DSS office, which explained to me that everything was in order and that these are the Government's regulations. The manager says that he is sorry, and I am sure that he is genuinely sorry. However, he has no alternative. He says:
In connection with your constituent being diabetic"—
the Minister should listen carefully to this—
you are probably aware that under the income support there are no additions for special circumstances and therefore no extra benefit can be paid.
That is one constituent who has certainly suffered as a result of the change from supplementary benefit to income support.
I have another letter which runs:
Our joint pensions have increased to £72·02 from £71·79 making a grand total of 23p increase … The rates have increased 49p this week making a shortfall of 26p and as you know the MEB have increased charges 9 per cent. However, I have lost my income support grant.
Perhaps the Minister will be interested in another sentence in the same letter which reads:
Is this the thanks that we pensioners are receiving after the sacrifices made during the 1939–45 conflict? If this is so, thank this corrupt Government will you please?
The constituent then writes that he hopes to see me at my surgery this coming Saturday.
That illustrates how pensioners who have written to me have expressed their deep concern about the way in which they have been treated. We have all said that if one person is wronged, that is a matter of concern to the House. I understand, however, that there are at least 800 cases in my constituency alone and the same is likely to be true all over the country.
My hon. Friend the Member for Livingston said that some people in Conservative-held constituencies have written to him. Tory Members are not here now, but have they written to the Minister? It might be said that they do not want to embarrass the Government. That is hardly a justification. If my party were in office and treating pensioners like this, I would be making the same kind of speech here and at the party meetings upstairs—

Mr. Robin Cook: And I would be resigning.

Mr. Winnick: The Minister smiles. Perhaps he does not believe me, but I can assure him that we would not be Labour politicians if we would not take our own Government to task if we disagreed with them on such matters as this.
I doubt whether, when constituents write to Tory Members on these issues, much representation is made on their behalf. If there is, what impact does it have on the Secretary of State and the Cabinet? I do not blame the junior Minister, although that is easy, as, in some respects, he is no more responsible than I am except that it might be said that he could resign. The decisions are made by the Cabinet. He carries out his duties as a Minister—he does not consider it appropriate to resign. That is a matter for him. I do not blame him—I blame the Cabinet.
People who claim transitional protection in regard to housing benefit have lost out too. Those who have applied to the Glasgow unit of the DSS have already lost £2 a week this month. No doubt another £2 or more will be taken next year, until the transitional benefit is phased out.
The retirement pension has not been increased as it should have been. That makes the case even worse. If retirement pensions had been increased in line with earnings, as was the case under Labour, the Library informs me that a retired married couple would now be


£17·55 a week better off, and a single pensioner would be £11·10 better off. That is money that they have been cheated of as a result of the Government's decision in 1979–80 to increase pensions only in line with prices.
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My constituents ask about electricity, gas and water charges. It is interesting to note that the retail prices index has increased by 110 per cent. since the Government have been in office. It could be argued that that is not a great victory in the battle against inflation. The price of gas has increased by 146 per cent., electricity has increased by 123 per cent. and water charges have gone up by 183 per cent. in the past 10 years.
Pensioners, including the poorest, have got to pay for gas, electricity and water out of a pittance. As a result of what has happened some pensioners have received no increase, or a pittance—23p just as I have pointed out. What are they to do about gas, electricity and water charges? What are they to do about food, the price of which constantly goes up? That is the background to new clause 5.
I understand that Tory Members have been asked to give £10 to celebrate the Prime Minister's being in office for 10 years. I do not know whether there is a three-line Whip on it. It is thought that the money will buy an appropriate present for the Prime Minister, who will have been in No. 10 for 10 years on 3 May.

Mr. Tony Banks: Can we get together a scheme to give £20 if she will go?

Mr. Winnick: My hon. Friend will be seconded with great enthusiasm by the entire parliamentary Labour party.
What are the feelings of pensioners, such as the four whose letters I have quoted, about the past 10 years? They are in a far worse position than they would have been. They live in conditions which no retired person should endure in an advanced industrial society. They have to suffer the misery and humiliation of poverty. They are unlikely to agree that the Prime Minister's 10th anniversary in office should occasion celebration.
Nothing can be done about this year, but the damage could be limited if new clause 5 were accepted. We all know what will happen to new clause 5. If there was any justice or any feeling of fairness, the Government would ensure that the poorest pensioners never again had no increase, or just a pittance. The new clause reflects the feeling of pensioners who are adversely affected and the large majority of people who, however they vote, know that it is wrong and unjust to penalise and harm pensioners as the Government are.

Mr. Tony Banks: I support new clause 5. Like others, I feel frustration and disbelief when Ministers and Conservative Members allow circumstances such as these to develop and to continue once they know they exist.
I hold my advice surgery every Friday and I am invariably left on Friday evenings with a feeling of wonderment that people can exist from day to day. Of course, we may see the most extreme cases. We do not see the generality, but it is those extreme cases who should concern us most. They exist in some number. We do not whip ourselves up into some synthetic anger on this issue. We do not delude ourselves. This is not propaganda which

has been dreamed up to embarrass the Government. These are real cases involving real people. It is the reality of everyday life in the London borough of Newham.
Many hon. Members are not here tonight. Many are having good dinners. I do riot begrudge anybody a good dinner. What I resent is the fact that people who are having such good dinners will come in and use their votes to deny good dinners to others.
I am not trying to score cheap party political points by pointing out how few Conservative Members are present. There should be more Opposition Members present, but we can point the finger at the Government because they take the decisions. Conservative Members are responsible for the situation in our constituencies and they allow it to persist. That is why we have the right to point the finger at the Conservative Benches and ask "Where are they? Why are they not here to defend their own constituencies?" If they disagree with us, think that we are alarmist, misleading the House or making it up, or if they can say, "On the contrary, in my constituency everyone is absolutely delighted with the new benefit regime and no one is any the worse off under the new system"—if they can put their hands up and say that that is an honest statement of the truth we shall listen to them. But they are not here. Perhaps many of them are absent because they do not want to hear the facts. They want to keep their consciences clear and do not want to hear about the realities of life for so many millions of our fellow citizens in Britain today. That is why I have drawn attention to the absence of Conservative Members.
I know that the Under-Secretary of State for Social Security is a decent man, and that perplexes me. He cordially received me and some people from the actors' union Equity so that we could explain a particular problem that actors are experiencing because of the change in the legislation and he courteously listened to what we had to say. I have no animus against the Minister, but I want to know whether he reads letters from individuals, and whether those letters touch his heart. They certainly touch our hearts, but the difference between us and the Government for the time being is that the Government can do something about it. All we can do is fulminate and say to the Government, "Surely you must realise how much suffering you are causing", and ask Ministers and Conservative Members to do something about it.
I feel that I am speaking in great hope but with no real expectation. When the Division is called, they will all come back from the bars, the dinners they are being bought outside, or the dinners that they are buying here and they will vote without knowing or being interested in what the arguments were, and the suffering in my constituency and in constituencies represented by Labour and Conservative Members will continue. Unlike the Conservative party, the Opposition are at least prepared to do something about it.

Mr. Battle: The contrast between the debate on new clause 5 and the previous debate is the absence of Conservative Members who are prepared to tell us how wealthy everyone is in Britain. It may be that they do not wish to hear the other side, but during the debate about child benefit they were keen to defend the tax cuts and the illusion that everyone on benefit was well protected. But that is not the reality.
One element that has been neglected in the debate is the time gap—the fact that the upratings are worked out in the Autumn Statement and the pension levels are set months


ahead of the March Budget statement when the taxes are changed. There is a six-month lag, so this year the benefits were uprated taking into account the rate of inflation of the previous October—5·9 per cent. When the pensioners receive the money from this April, inflation is 7·9 per cent., so pensioners lose out from the first week simply because of the inflation figure. If anyone feels that that is not important, they should remember that it means that a single pensioner loses 43p a week and a pensioner couple lose 71p a week. As my hon. Friends have reminded the House, I am sure that we are all aware that people on very low incomes keep account of every penny because they have to make ends meet. Because they have to pay the price for the cuts, they can certainly do the arithmetic. They know that their income is reducing because when they go to the shops they cannot get what they could get the previous week, and that should be taken into account before Conservative Members simply suggest that the average figure should be used to work out incomes and everyone is doing fine under the benefit system.
As was made clear in the reply to a parliamentary question that I tabled, had pensions been increased every year in line with earnings, as was done before the present Government came to office, a single pensioner would receive £49·30 a week and a pensioner couple would receive £79 a week. Before this year's uprating, pensioners had already suffered two hidden losses. After the uprating a single pensioner receives £43·60, yet it is interesting to compare that figure with what the Government consider pensioners should receive, as expressed in the income support applicable amounts—£48·60, or £5 more than the basic pension. In other words, in their calculation of benefit figures, the Government accept that the pension is underpaid.
One million pensioners live below the poverty line, a further 2 million live at the minimum level of income support and a further 3 million live only 40 per cent. above that minimum level. A total of some 6 million pensioners—three fifths of all British pensioners—live on or near the margins of poverty. It is no wonder that many pensioners are now writing to Members of Parliament and demanding a fair deal.
If Conservative Members are convinced that we are drawing attention to hard cases that do not bear any relation to the structure of the benefits system, will the Minister spell out how many pensioners living on or below the poverty line would benefit from an uprating in line with inflation? I do not apologise for citing a case. A pensioner in my constituency—I shall refer to her as Mrs. J—receives a total weekly income of £51·24, and it has been at that level since November 1987 due to a payment of transitional allowance in April 1988 of £7·19 to protect the additional allowance she had been receiving due to her diabetes. This year, although her bills have gone up, her money remains the same as she loses the £2·04 from her transitional addition. When we take up constituency cases we write to the Department of Social Security, and I received the following reply:
Thank you for your letter … Mrs. J … is currently receiving a combined payment of Retirement Pension and Income Support amounting to £51.24 per week, calculated as follows:



Personal Allowance
£33·40


Pensioner Premium
£10·65


Transitional Addition
£7·19



£51·24


… Expenses like a special diabetic diet are no longer separately itemised and added to an individual claimant's benefit, and I am afraid Mrs. J … will not be entitled to any additional benefit even though she now has to pay for special foodstuffs.
The letter goes on to explain how the transitional addition was a temporary cushion to which she is no longer entitled. At the end of the letter is the statement:
I hope this explains the situation to your satisfaction: I am sorry my reply could not be more favourable to Mrs. J.
Will the Under-Secretary tell us how long the phrase
I am sorry my reply could not be more favourable
will he logged into the word processor used to reply to the letters sent to him week after week? Hundreds of our constituents come to us spelling out in fine detail how much income they have lost per week. The person at the DSS may be sorry about it, but our constituents have to make do. They have to visit the same shops and purchase their goods with less money. For those claiming housing benefit the problems are the same. A total of 40 per cent. of those claiming the transitional addition lost out on 10 April this year.
There is a gentleman in my constituency who spends about 20 per cent. of his working hours trying to tackle forms and write to the Glasgow unit. He was asked to fill in and return a form for his pension increase even before the social security office could work out what he was entitled to. Therefore, he missed out because he missed the deadline. He lost a further £2 last week but was told that he could receive £2·05 for an original loss of £6·50 if he filled in another form. The people I represent are tired of filling in complicated forms to try to keep their incomes at the same level.
The Minister may say that Opposition Members have again quoted from a few letters and that they are isolated, difficult cases, but we could quote from such letters thousands of times. Taken together, they demonstrate the flaws in the structure of the social security system put together by the Government. A structural fault is pricing many pensioners down into poverty. The holes in the safety net are so large that thousands of pensioners are sinking through it.
In the previous debate Conservative Members suggested that there is a trickle down of wealth to everyone at the bottom. That is not so. It is not the case that, as one Conservative Member suggested, the average wage will pull everybody up. The incomes of those most in need of protection are falling behind weekly. Tonight we have an opportunity to do something about that for next year. We have an opportunity to ensure that those in need receive some basic justice.

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The Parliamentary Under-Secretary of State for Social Security (Mr. Peter Lloyd): I know that there is concern among hon. Members that not all their constituents will have received an increase in benefits at this uprating. I also realise that there are understandable worries about hard cases such as those that hon. Members have used to illustrate their arguments.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) asked how long I spend reading letters and when I last read any. I spent about four or five hours yesterday reading letters because I receive many of them. They were not all about transitional payments; in fact such letters were in a minority. However, I read them. As the hon. Gentleman suggested, many of them make hard and painful reading, but no more so than many of the other letters I receive. I reflect upon the letters that my predecessor would have been reading before the changes were introduced last April and I am convinced that many of the individuals who wrote those letters will have been helped by the changes. It is necessary to see the changes that occurred last April in that balanced way. There are difficult cases and I do not seek to dismiss them or push them to one side. However, the social security system is designed to tackle many difficulties and transitional payments and those in receipt of them are not always the most difficult cases.
The hon. Member for Livingston (Mr. Cook) quoted some cases. He said that if one makes an assessment of the inflation rate it seems that on present estimates about 200,000 people will still be on transitional payments after the uprating. He ased me to consider the position of the disabled who will have no increase to look forward to for some years. The hon. Gentleman forgets that in October there will be an increase in income support rates for disabled persons over 60 years of age. As I said during social security questions last week, we shall keep all the premiums under review and act if pressure on a particular group of claimants becomes manifest.
The hon. Member for Walsall, North (Mr. Winnick) complained about the absence of Conservative Members. It is worth putting on record that when he made those observations four Labour Back Benchers were present, of whom he was one. The hon. Member for Newham, North-West (Mr. Banks) was open enough to acknowledge that, so I acknowledge his honesty.

Mr. Kirkwood: I have just finished digesting the Minister's earlier remark that the Government can review the levels of flat-rate premiums if the need arises. Is the Department actively trying to identify categories that are suffering particular hardship? If so, will he be prepared to make a statement at a later stage?

Mr. Lloyd: We review the categories from statistical information and information about individuals. All the examples that we are given, which we read, form a picture. The fact that we shall be improving premiums in two cases this October shows that monitoring has an effect. We shall continue to consider the information available to us, and where it is evident that there is pressure on a particular group we shall act accordingly.
The hon. Member for Walsall, North referred to price increases, especially fuel price increases. Over the past five years, electricity and gas charges have fallen in real terms, which has benefited those on supplementary benefit and income support. I remind him that in the years after 1979 supplementary benefit increased by 5 per cent. above the rate of inflation. It was a more generous benefit than when the Labour party left office. The total amount paid in supplementary benefit was redirected to income support last April.
I am grateful to the hon. Member for Newham, North-West for saying that I listened courteously to the

small delegation that he brought to see me. I took full note of what was said, and he will find that the arguments that were put will be reflected in the guidance that is issued to local benefit officers. I confirm what I said to the hon. Member for Roxburgh and Berwickshire that we shall take note of the pressure points that have been mentioned this evening by hon. Members.

Mr. Winnick: Does the Minister intend to comment on the four cases that I brought to the House's attention, in three of which there was no increase and in the other an increase of only 23p for reasons explained by the local DSS office? Will the Minister comment on information from the Library that if the pension had been increased in line with earnings since 1979 a married person would be £17·55 and a single person £11·10p a week better off?

Mr. Lloyd: That set of figures is frequently produced at Question Time and the Opposition repeatedly make the point that state retirement pensions increased faster under the Labour Government. This Government respond, more convincingly, by saying that, overall, pensioners' incomes have increased much faster than under the Labour Government. It is total incomes that are of interest, not any special part of income.

Mr. Battle: How many pensioners have to live solely on state pensions? That factor obviously affects the hon. Gentleman's statement. Does he suggest that the pensioners with supplementary incomes other than the state pension, the richer pensioners, get richer? The poorer pensioners are obviously worse off.

Mr. Lloyd: From memory, about 1·7 million pensioners are on income support. I have been asked how many of those are getting their full increase this year. The answer is 1·2 million. To do the sum for the hon. Gentleman, that leaves 300,000 pensioners who will get an increase in part and 200,000 who will get no increase this year.

Mr. Winnick: The poorest.

Mr. Lloyd: They will not be the poorest. That is where the hon. Gentleman misapprehends what the changes do. Pensioners with transitional additions will have had incomes from income support above the incomes of those coming on to income support since last April.
The hon. Member for Walsall, North asked me to comment on particular cases. I do not have the details of all of them, and it would be wrong to comment on them individually. The hon. Gentleman made an observation about the special addition for the diabetic diet. We would in any case have had to review—as would a Labour Government—those special additions that were failing Ito reach all the people who might have qualified for them. They were complex, and considerable knowledge was needed to know what to apply for. Medical opinion makes it clear that a diet suitable for diabetics is no more expensive than a sensible, healthy diet for someone who is not a diabetic. It would therefore have been right to look again at those additions.
It is essential to keep the whole issue and the particular cases which have been raised in proportion and context, real though they are. The majority of income support claimants will gain and have gained at uprating. We estimate that 73 per cent.—nearly 3·25 million—will receive their full increase and that about 610,000, or 14 per cent., will receive a partial increase. That will leave about


600,000 whose benefit will stay the same. After the uprating in 1990, we estimate that rather fewer than 200,000 claimants will still need this protection—a tiny minority of the millions of social security benefit recipients who will get increases.
There are important reasons for reducing transitional protection at the annual uprating. There is the question of resources. As hon. Members are well aware, our aim is to target help on those groups identified as having the greatest need. Transitional protection is expected to have cost some £200 million in its first year. By its nature, it is poorly targeted as it reflects the inequities of the old scheme. To continue to pay protection indefinitely would not be a good use of resources.
I shall also say, as the hon. Member for Livingston (Mr. Cook) expected me to do, that there is a question of fairness. Claimants with protection are necessarily better off than those in similar circumstances who claimed after the start of the new scheme and who do not have access to protection. It would be wrong to perpetuate that inequality between different groups of claimants.
9.15 pm
That is not to say that important improvements should not be made in particular circumstances. I have already emphasised that on a couple of occasions and we have shown our readiness to listen to particular problems by, for example, providing special protection rules for severely disabled people going into certain types of respite care. This autumn's improvements for older and disabled pensioners who are entitled to income support will be welcomed. We believe that they are in special need of extra help and they will be exempted from the normal transitional protection rules. Although I am unable to accept this general relaxation to the transitional protection rules, we are looking carefully at the different categories and how they are affected. What I have said shows that we are prepared to act.
I am also pleased to be able to announce a specific improvement for a certain group of people who try to become independent of public funds. Hon. Members, especially those who served on the Committee, will be aware of an amendment to the Bill, brought forward in Committee, to remove a disincentive to work for a trial period by amending the transitional protection provisions. The Government consider it crucial that people who want to work should not be discouraged from doing so. We have, therefore, introduced some special rules to enable certain people to take a job for a trial period without incurring the risk of benefit sanctions if they leave their job voluntarily within a specified period. The new rules do not extend to transitional protection. We promised to look at this limitation and I can now tell the House that steps will be taken, through regulations, to ensure that the people to whom these work easements apply will not lose their transitional protection.
As I said at the outset, I appreciate that there are some hard cases and hon. Members have understandably and properly raised them this evening. I do not want to make light of them or to dismiss them. However, it must be said that all those who have transitional protection are, by definition, receiving more than those in the same general circumstances. Erosion of this protection does no more than move them towards the same level.
It would not have been possible to make the radical changes to our benefit system, which were so badly needed, without there being losers as well as gainers. We should not lose sight of the fact that in the changeover from supplementary benefit to income support, the number of gainers exceeded the number of losers. Of the 60 per cent. estimated to have gained in cash terms, the average gain was £3·85, not counting the sum that was built in for compensation for 20 per cent. of rates. Some 600,000 are expected to have gained more than £5 and another I million are expected to have gained between £2 and £5.
The new system is simpler, making it easier to administer and, more importantly, easier to claim. It is better targeted to groups whose need is greatest, such as the sick, the disabled and families with young children. It is also fairer between individuals in similar circumstances. We always recognised that the transition from the old system to the new would be uncomfortable and sometimes painful for the minority who lost. Such a choppy period, as the hon. Member for Birkenhead (Mr. Field) said, would be inevitable if the changes he seeks were made. That is why we introduced transitional protection, which cushions reductions at the point of change. But it is an essential part of the much needed improvement to our system that those transitional additions should be reduced as personal circumstances change and as benefits are generally uprated. I ask the House to reject the new clause.

Mr. Robin Cook: By leave of the House, I want to respond briefly to the Minister. I begin by welcoming the fact that he complimented hon. Members on a serious and moving debate five times in his reply, appearing vaguely embarrassed about what he had to read to the House.
In the light of our debate, I regret that the Minister should again have taken refuge in quoting the numbers on who came out better on the cash transfer from the old system to the new. As he will know, that has been utterly discredited as a way of measuring the change. He should be measuring those who came out better in real terms and those who came out worse off in real terms.
Perhaps it is worth stressing that point because the immense irony of the figures claimed by Ministers last April is that every single one of the cases described in this debate would be corralled in the 88 per cent. who Ministers told us last year would be no worse off or would be better off as a result of the changes. I defy Ministers to explain to those who have written to me and my hon. Friends that they are no worse off as a result of last year's changes.
The Minister challenged the statement by my hon. Friends that we are talking about people who are among the poorest. He said that they receive rather more in income support than others. That is true. They have a marginally higher income than others on income support, but they have a higher income because they have higher costs. They still have the costs; they now no longer have the income to meet those costs.
The Minister's observation that there is no extra cost in suffering from diabetes suggests to me that some damage has been done by the separation of the Departments of Health and Social Security. Perhaps it is possible to cope with a diet for a diabetic with the same amount that one would pay for a sensible healthy diet for an average person, but the trouble is that income support payments do not provide for a sensible healthy diet for an average person, and certainly not for a diet for a diabetic.
The Minister has enlightened us in one respect. He has confirmed that next April 200,000 pensioners and other claimants can expect no uprating in their benefits. Their incomes will be frozen at exactly the same level as the claimants first received in April 1987 and half those claimants can expect their benefits to be frozen again in 1991. That cannot be acceptable. I regret that the Minister chose to make resources one of his defences. It would cost a beggarly £30 million to extend uprating to that category. Only last month in the Budget the Government confirmed that they are sitting on a record surplus of £14,000 million. If Ministers tell us that they cannot find £30 million to assist this group, although they recognise that the cases make hard and painful reading, their arguments deserve to be treated with contempt, and we shall vote against them.

Question put, That the clause be read a Second time:—

The House divided: Ayes 171, Noes 299.

Division No. 172]
[9.21 pm


AYES


Abbott, Ms Diane
Flannery, Martin


Adams, Allen (Paisley N)
Flynn, Paul


Anderson, Donald
Foot, Rt Hon Michael


Archer, Rt Hon Peter
Foster, Derek


Armstrong, Hilary
Foulkes, George


Ashley, Rt Hon Jack
Fraser, John


Ashton, Joe
Fyfe, Maria


Banks, Tony (Newham NW)
Galbraith, Sam


Barnes, Harry (Derbyshire NE)
Galloway, George


Barnes, Mrs Rosie (Greenwich)
Garrett, John (Norwich South)


Barron, Kevin
Garrett, Ted (Wallsend)


Battle, John
Golding, Mrs Llin


Beckett, Margaret
Gordon, Mildred


Beith, A. J.
Graham, Thomas


Benn, Rt Hon Tony
Griffiths, Nigel (Edinburgh S)


Bennett, A. F. (D'nt'n &amp; R'dish)
Grocott, Bruce


Bermingham, Gerald
Hardy, Peter


Bidwell, Sydney
Henderson, Doug


Blair, Tony
Hinchliffe, David


Blunkett, David
Hogg, N. (C'nauld &amp; Kilsyth)


Boyes, Roland
Holland, Stuart


Bradley, Keith
Home Robertson, John


Bray, Dr Jeremy
Hood, Jimmy


Brown, Gordon (D'mline E)
Howell, Rt Hon D. (S'heath)


Brown, Ron (Edinburgh Leith)
Howells, Dr. Kim (Pontypridd)


Buchan, Norman
Hoyle, Doug


Buckley, George J.
Hughes, John (Coventry NE)


Callaghan, Jim
Hughes, Robert (Aberdeen N)


Campbell, Menzies (Fife NE)
Hughes, Roy (Newport E)


Campbell, Ron (Blyth Valley)
Hughes, Sean (Knowsley S)


Campbell-Savours, D. N.
Illsley, Eric


Carlile, Alex (Mont'g)
Ingram, Adam


Clark, Dr David (S Shields)
Janner, Greville


Clarke, Tom (Monklands W)
Kaufman, Rt Hon Gerald


Clwyd, Mrs Ann
Kilfedder, James


Cohen, Harry
Kinnock, Rt Hon Neil


Cook, Robin (Livingston)
Kirkwood, Archy


Corbett, Robin
Lamond, James


Corbyn, Jeremy
Leighton, Ron


Crowther, Stan
Lestor, Joan (Eccles)


Cryer, Bob
Lewis, Terry


Cummings, John
Lofthouse, Geoffrey


Darling, Alistair
Loyden, Eddie


Davies, Rt Hon Denzil (Llanelli)
McAllion, John


Davis, Terry (B'ham Hodge H'l)
McAvoy, Thomas


Dixon, Don
Macdonald, Calum A.


Dobson, Frank
McKelvey, William


Doran, Frank
McLeish, Henry


Duffy, A. E. P.
Maclennan, Robert


Dunwoody, Hon Mrs Gwyneth
Madden, Max


Eadie, Alexander
Mahon, Mrs Alice


Evans, John (St Helens N)
Mallon, Seamus


Ewing, Mrs Margaret (Moray)
Marek, Dr John


Faulds, Andrew
Marshall, David (Shettleston)


Fearn, Ronald
Martlew, Eric


Fields, Terry (L'pool B G'n)
Maxton, John





Meale, Alan
Sedgemore, Brian


Michie, Bill (Sheffield Heeley)
Sheerman, Barry


Michie, Mrs Ray (Arg'l &amp; Bute)
Sheldon, Rt Hon Robert


Mitchell, Austin (G't Grimsby)
Skinner, Dennis


Moonie, Dr Lewis
Smith, Andrew (Oxford E)


Morgan, Rhodri
Smith, C. (Isl'ton &amp; F'bury)


Morley, Elliott
Smyth, Rev Martin (Belfast S)


Morris, Rt Hon A. (W'shawe)
Snape, Peter


Morris, Rt Hon J. (Aberavon)
Soley, Clive


Murphy, Paul
Spearing, Nigel


Nellist, Dave
Steinberg, Gerry


Oakes, Rt Hon Gordon
Strang, Gavin


O'Brien, William
Straw, Jack


Parry, Robert
Taylor, Matthew (Truro)


Patchett, Terry
Thompson, Jack (Wansbeck)


Pendry, Tom
Vaz, Keith


Pike, Peter L.
Wall, Pat


Powell, Ray (Ogmore)
Wallace, James


Radice, Giles
Wareing, Robert N.


Randall, Stuart
Welsh, Andrew (Angus E)


Redmond, Martin
Wigley, Dafydd


Rees, Rt Hon Merlyn
Williams, Rt Hon Alan


Reid, Dr John
Wilson, Brian


Richardson, Jo
Winnick, David


Robertson, George
Wise, Mrs Audrey


Robinson, Geoffrey
Wray, Jimmy


Rogers, Allan
Young, David (Bolton SE)


Rooker, Jeff



Ross, Ernie (Dundee W)
Tellers for the Ayes:


Ruddock, Joan
Mr. Frank Haynes and


Salmond, Alex
Mr. Allen McKay.


NOES


Adley, Robert
Cash, William


Aitken, Jonathan
Chapman, Sydney


Alexander, Richard
Clark, Dr Michael (Rochford)


Alison, Rt Hon Michael
Clark, Sir W. (Croydon S)


Allason, Rupert
Clarke, Rt Hon K. (Rushcliffe)


Amess, David
Colvin, Michael


Amos, Alan
Conway, Derek


Arbuthnot, James
Coombs, Anthony (Wyre F'rest)


Arnold, Jacques (Gravesham)
Coombs, Simon (Swindon)


Arnold, Tom (Hazel Grove)
Cope, Rt Hon John


Ashby, David
Couchman, James


Aspinwall, Jack
Cran, James


Baker, Nicholas (Dorset N)
Critchley, Julian


Batiste, Spencer
Currie, Mrs Edwina


Beaumont-Dark, Anthony
Curry, David


Bellingham, Henry
Davies, Q. (Stamf'd &amp; Spald'g)


Bendall, Vivian
Davis, David (Boothferry)


Bennett, Nicholas (Pembroke)
Day, Stephen


Benyon, W.
Devlin, Tim


Bevan, David Gilroy
Dickens, Geoffrey


Biffen, Rt Hon John
Dicks, Terry


Blaker, Rt Hon Sir Peter
Dorrell, Stephen


Body, Sir Richard
Douglas-Hamilton, Lord James


Bonsor, Sir Nicholas
Dover, Den


Boscawen, Hon Robert
Dunn, Bob


Boswell, Tim
Dykes, Hugh


Bottomley, Peter
Evans, David (Welwyn Hatf'd)


Bottomley, Mrs Virginia
Evennett, David


Bowden, Gerald (Dulwich)
Fallon, Michael


Boyson, Rt Hon Dr Sir Rhodes
Favell, Tony


Braine, Rt Hon Sir Bernard
Fenner, Dame Peggy


Brandon-Bravo, Martin
Field, Barry (Isle of Wight)


Brazier, Julian
Finsberg, Sir Geoffrey


Bright, Graham
Forman, Nigel


Brooke, Rt Hon Peter
Forsyth, Michael (Stirling)


Brown, Michael (Brigg &amp; Cl't's)
Forth, Eric


Bruce, Ian (Dorset South)
Fowler, Rt Hon Norman


Budgen, Nicholas
Fox, Sir Marcus


Burns, Simon
Franks, Cecil


Burt, Alistair
Freeman, Roger


Butcher, John
French, Douglas


Butler, Chris
Fry, Peter


Butterfill, John
Gale, Roger


Carlisle, John, (Luton N)
Gill, Christopher


Carlisle, Kenneth (Lincoln)
Gilmour, Rt Hon Sir Ian


Carrington, Matthew
Glyn, Dr Alan


Carttiss, Michael
Goodlad, Alastair






Goodson-Wickes, Dr Charles
Marland, Paul


Gorman, Mrs Teresa
Marlow, Tony


Gorst, John
Marshall, John (Hendon S)


Grant, Sir Anthony (CambsSW)
Marshall, Michael (Arundel)


Greenway, John (Ryedale)
Martin, David (Portsmouth S)


Gregory, Conal
Maude, Hon Francis


Griffiths, Peter (Portsmouth N)
Mawhinney, Dr Brian


Grist, Ian
Maxwell-Hyslop, Robin


Ground, Patrick
Meyer, Sir Anthony


Grylls, Michael
Miller, Sir Hal


Gummer, Rt Hon John Selwyn
Miscampbell, Norman


Hague, William
Mitchell, Andrew (Gedling)


Hamilton, Hon Archie (Epsom)
Mitchell, Sir David


Hamilton, Neil (Tatton)
Moate, Roger


Hampson, Dr Keith
Monro, Sir Hector


Hanley, Jeremy
Montgomery, Sir Fergus


Hannam, John
Moore, Rt Hon John


Hargreaves, A. (B'ham H'll Gr')
Morrison, Rt Hon P (Chester)


Hargreaves, Ken (Hyndburn)
Moss, Malcolm


Harris, David
Moynihan, Hon Colin


Haselhurst, Alan
Mudd, David


Hawkins, Christopher
Neale, Gerrard


Hayes, Jerry
Needham, Richard


Hayward, Robert
Nelson, Anthony


Heathcoat-Amory, David
Newton, Rt Hon Tony


Heddle, John
Nicholls, Patrick


Hicks, Mrs Maureen (Wolv' NE)
Nicholson, David (Taunton)


Hicks, Robert (Cornwall SE)
Nicholson, Emma (Devon West)


Higgins, Rt Hon Terence L.
Norris, Steve


Hill, James
Onslow, Rt Hon Cranley


Hind, Kenneth
Oppenheim, Phillip


Hogg, Hon Douglas (Gr'th'm)
Page, Richard


Holt, Richard
Paice, James


Howard, Michael
Patnick, Irvine


Howarth, Alan (Strat'd-on-A)
Patten, Chris (Bath)


Howarth, G. (Cannock &amp; B'wd)
Pattie, Rt Hon Sir Geoffrey


Hughes, Robert G. (Harrow W)
Pawsey, James


Hunt, David (Wirral W)
Porter, Barry (Wirral S)


Hunter, Andrew
Porter, David (Waveney)


Hurd, Rt Hon Douglas
Portillo, Michael


Irvine, Michael
Powell, William (Corby)


Jack, Michael
Price, Sir David


Jackson, Robert
Raffan, Keith


Janman, Tim
Raison, Rt Hon Timothy


Johnson Smith, Sir Geoffrey
Rathbone, Tim


Jones, Robert B (Herts W)
Redwood, John


Kellett-Bowman, Dame Elaine
Rhodes James, Robert


Key, Robert
Riddick, Graham


King, Roger (B'ham N'thfield)
Ridley, Rt Hon Nicholas


Kirkhope, Timothy
Ridsdale, Sir Julian


Knapman, Roger
Rifkind, Rt Hon Malcolm


Knight, Greg (Derby North)
Roberts, Wyn (Conwy)


Knight, Dame Jill (Edgbaston)
Roe, Mrs Marion


Knowles, Michael
Rossi, Sir Hugh


Knox, David
Rost, Peter


Lamont, Rt Hon Norman
Rumbold, Mrs Angela


Lang, Ian
Ryder, Richard


Latham, Michael
Sackville, Hon Tom


Lawrence, Ivan
Sainsbury, Hon Tim


Lee, John (Pendle)
Scott, Nicholas


Leigh, Edward (Gainsbor'gh)
Shaw, David (Dover)


Lennox-Boyd, Hon Mark
Shaw, Sir Giles (Pudsey)


Lester, Jim (Broxtowe)
Shaw, Sir Michael (Scarb')


Lightbown, David
Shelton, Sir William


Lilley, Peter
Shephard, Mrs G. (Norfolk SW)


Lloyd, Sir Ian (Havant)
Shepherd, Colin (Hereford)


Lloyd, Peter (Fareham)
Shepherd, Richard (Aldridge)


Lord, Michael
Shersby, Michael


Luce, Rt Hon Richard
Sims, Roger


Lyell, Sir Nicholas
Skeet, Sir Trevor


McCrindle, Robert
Smith, Sir Dudley (Warwick)


MacKay, Andrew (E Berkshire)
Smith, Tim (Beaconsfield)


Maclean, David
Soames, Hon Nicholas


McLoughlin, Patrick
Speed, Keith


McNair-Wilson, Sir Michael
Speller, Tony


McNair-Wilson, P. (New Forest)
Spicer, Sir Jim (Dorset W)


Madel, David
Spicer, Michael (S Worcs)


Malins, Humfrey
Squire, Robin


Mans, Keith
Stanbrook, Ivor


Maples, John
Stanley, Rt Hon Sir John





Steen, Anthony
Waddington, Rt Hon David


Stevens, Lewis
Waldegrave, Hon William


Stewart, Allan (Eastwood)
Walden, George


Stewart, Andy (Sherwood)
Walker, Bill (T'side North)


Stewart, Rt Hon Ian (Herts N)
Waller, Gary


Stokes, Sir John
Walters, Sir Dennis


Stradling Thomas, Sir John
Ward, John


Sumberg, David
Wardle, Charles (Bexhill)


Summerson, Hugo
Warren, Kenneth


Tapsell, Sir Peter
Watts, John


Taylor, John M (Solihull)
Wheeler, John


Taylor, Teddy (S'end E)
Whitney, Ray


Thatcher, Rt Hon Margaret
Widdecombe, Ann


Thompson, D. (Calder Valley)
Wiggin, Jerry


Thompson, Patrick (Norwich N)
Wilshire, David


Thornton, Malcolm
Wolfson, Mark


Thurnham, Peter
Wood, Timothy


Townend, John (Bridlington)
Woodcock, Mike


Townsend, Cyril D. (B'heath)
Yeo, Tim


Tracey, Richard
Young, Sir George (Acton)


Tredinnick, David



Trippier, David
Tellers for the Noes:


Trotter, Neville
Mr. Tristan Garel-Jones and


Twinn, Dr Ian
Mr. Tony Durant.


Viggers, Peter

Question accordingly negatived.

New Clause 6

INCOME RELATED BENEFITS

(1) In paragraph 1 of Part 1 of Schedule 2 to the Income Support (General) Regulations 1987, after the words '(applicable amounts and polygamous marriages)' there shall be inserted the words 'except that, for this purpose, any person aged less than 25 to whom any paragraph in Part II of Schedule IA applies or would apply if he were aged 16 and had not reached the relevant date determined under regulation 13A(3)(b) shall be treated as if he were aged 25'.
(2) In paragraph 1 of Part I of Schedule 2 to the Housing Benefit (General) Regulations 1987, after the words '17(a) and (b)' there shall be inserted the words 'except that, for this purpose, any person aged less than 25 to whom any paragraph in Part II of Schedule IA to the Income Support (General) Regulations 1987 applies, or would apply if he were aged 16, claiming income support and had not reached the relevant date determined under regulation 13A(3)(b) of those regulations, shall be treated as if he were aged 25'.".—[Mr. Flynn.]

Brought up, and read the First time.

Mr. Speaker: With this it will be convenient to take amendment No. 106, in clause 10, in page 8, line 4, at end add—
(3) In section 22 of the 1986 Act (income related benefits) after subsection (8) there shall be inserted—
'(9) In relation to income support and housing benefit the applicable amount for a person in board and lodging accommodation shall include an amount in respect of his being a person in board and lodging accommodation.
(10) For the purposes of this section "board and lodging" accommodation means—

(a) accommodation provided to the claimant or, if he is a member of a family, to him or any other members of his family, for a charge which is inclusive of the provision of that accommodation and at least some cooked or prepared meals which are both prepared and consumed in that accommodation or associated premises: or
(b) accommodation provided in a hotel, guesthouse, lodging-house or other similar establishment; or where facilities for the preparation of food are inadequate to the needs of that person.

(11) Regulations may prescribe the circumstances in which the facilities for the preparation of food are deemed to be inadequate.'.".

Mr. Paul Flynn: I beg to move, That the clause he read a Second time.
This issue raised the most passionate feelings in Committee, when we heard heartbreaking stories of young people who were suffering as a result of the social security changes. The purpose of new clause 6 is to remove some of the worst excesses of the Government's calamitous changes, which have made tens of thousands of the most vulnerable young people into outcasts of the social security system. Last week, we generously and gratefully acknowledged the speed with which the Government had moved. They promised in Committee that they would put some improvements on the fast track, and, in fact, they delivered some improvements within a few days of the final Committee sitting. However, while we are happy about the speed of the Government's action, we are less happy about the substance of the changes, which are not adequate to meet the problem.
A large group of young people in this country are gratuitously exposed to poverty. The object of the new clause is very modest. What we seek to do is to extend the rates of income support and housing benefit for the over-25s to people under 25 in the following categories: those who are married; those who were previously in care and are not living with their parents or anyone acting in the place of their parents; those who are living away from the parental home, in accommodation that they entered as part of a programme of rehabilitation or resettlement, to avoid physical or sexual abuse, or because of mental or physical handicap or illness; and those living away from the parental home because the parents cannot afford to support them as they are chronically sick or disabled, or because they are in prison or prohibited from entering the country. In short, these are the very young people who are married, who do not have a parental home to which they can safely return, and who therefore are obliged to pay for their own accommodation, whether as boarders or as householders.
At present, the existence of this group of people is recognised only to the extent of allowing those aged 16 to 17 in these categories to receive income support during the three months child benefit extension period.
As a result of the great pressures that have been exerted on the Government by the Opposition, many organisations, local authorities and hon. Members on both sides of the Standing Committee on the Bill, the small concessions announced by the Minister on 13 March came into effect. Again, these affect only those aged 16 to 17. From next July, if they happen to qualify for income support—which most of them do not—they will get the rate that is applicable to those between 18 and 24. In other words, they will receive £27·50 a week instead of only £20·80. That is still £7·40 below the normal rate of £34·90 payable to people 25 or older.
We must question the basis of having separate rates for young people and it is worth looking at the Government's justification for it. When they introduced the lower rate of income support for under-25s, the grounds were explained in the 1985 Green Paper, "Reform of Social Security". It stated:
it is clear that at the age of 18 the majority of claimants are not fully independent and that the great majority of claimants above age 25 are … In 1983 nearly 90 per cent. of all claimants over 25 were getting the higher householder rate. By contrast the clear majority of claimants under 25 were living in someone else's household. The Government have concluded that an appropriate dividing line is age 25.

The Minister nods. It is simplicity which the Government seek but, unfortunately, there are casualties of simplicity. The young people involved, like all other categories forced into simplified little boxes, do not fit neatly into them. The fact that many claimants under 25 were independent householders, whether through choice or necessity, was ignored altogether. All under-25s were to get a lower rate of benefit, regardless of their circumstances. Boarders under 25, as well as householders, were affected and until this month they were subjected to time limits which meant that their board and lodging charges were met for only a few weeks, after which they received only the basic under-25 income support rate. Under the new arrangements introduced this month, income support no longer covers board and lodging charges and the under-25 rate applies from the start of the claim. Despite the abolition of the time limits, board and lodging accommodation will remain out of reach of most claimants in this age group. They will no longer be able to afford it, even temporarily. Amendment No. 106, which is coupled with the new clause, deals with that.
The aim of new clause 6 is specifically modest. It aims to be practical and acceptable to the Government. It does not seek to abolish the under-25 benefit rate entirely, as we should like, although there is a strong case for doing that. It does not even seek to abolish it for all young people who are living independently, for which an even stronger case can be made. The new clause concentrates exclusively on those who set up home because they are married or do not have parental homes to which to return, even if they wish to do so. There is no justification for paying a lower rate of benefit to people in those circumstances simply because they are under 25.
We heard a great deal in Committee about care leavers. Each year approximately 8,000 young people leave care. The majority of them have no suitable parental home. Usually they have not lived in a parental home for many years. Research shows that about 70 per cent. of our young care leavers live on their own compared with less than 1 per cent. of the general population of the same age. Successive surveys also show that young people who have left care are over-represented among the homeless.
Centre Point in London estimated that 25 per cent. of the homeless that it looks after and knows of previously came from care. A Government report has suggested that the figure is 33 per cent. Several local authorities have recently noted that they are having to keep young people in care longer or, on occasions, readmitting them into care—sometimes into inappropriate placements.
There has been a deluge of submissions from local authorities and local authority associations pointing out that there is an increasing problem. Some social services departments are now reporting that young people over 16 are seeking their assistance because they cannot return home, often as a result of abuse within their families. Many of them have waited until their 16th birthdays to leave home. The social services departments are reporting that most of those youngsters were unknown to them previously.
9.45 pm
Since the changes were announced on 13 March, we have received dozens of examples from Barnardos, the Association of Directors of Social Services, and the bodies representing local authorities. We have a wide choice of cases from which to choose. We could choose some


spectacular ones or some sad ones, often the result of mistakes and inefficiency, where young people have been left without any income at all. I will not quote those cases, but I shall cite the cases of two youngsters from the prosperous area of Canterbury, who have come to the attention of a small charity called Rented Accommodation for Teenagers. RAFT has cited two cases and told us how they will be affected. The cases are typical of the position of young people and they show what will happen to them after July.
The first case is Wilfred, who is 17 years old. He was thrown out of home by his unemployed stepfather last year after months of hostility that had threatened to break up his mother's marriage. After sleeping on friends' floors he went to RAFT, because his stepfather was adamant that he could not return and Wilfred believed that it was not safe to do so. After eight months with a family, under the supervision of the charity, Wilfred has progressed well and is ready for a place of his own.
The charity is negotiating with the city council to manage a few small units of accommodation to sublet to young people, whom it will continue to support. The rent and rates bill is £36·41 a week and Wilfred receives a training allowance of £28·50. He gets £23·02 housing benefit, leaving him with £15·11 for total weekly outgoings. He pays his first £3 travel costs to work, so that leaves £12·11 for food, electricity and clothes.
Following the Minister's announcement on 13 March, Wilfred will look forward to receiving £15·66 from July. That is a totally inadequate amount to meet all his needs.
The second example that the charity provides is that of Tracy and, sadly, is a case that is typical of many others that we heard about in Committee and in a very moving press conference that was held afterwards.
Tracy was 16 years old when she went to RAFT as an alternative to going into care, which she did not want, partly because that would have disrupted her last year of school. She had alleged sexual assault by her father. She had been staying with a family, which was involved with the charity, while hoping to get back to her mother if her father was put in prison for the offence.
Following the transfer of board and lodging payments from the Department of Social Security to housing benefits at the city council, Tracy, being on a YTS placement, has £2·20 a week to pay for her fares to work, her clothing, her toiletries and her entertainment. As she has to pay the first £3 of her fares, she has minus 80p for all personal expenses. Her mother, who—again not unusually in these circumstances—blames Tracy in part for the family tensions, gives her no money.
Following the announcement on 13 March, from July Tracy should receive the princely sum of £2·50 a week for toiletries, for clothing and for entertainment.
Those figures have been verified. Those income levels are punitive to those young people who have been victims for long periods.
It is worth comparing the benefits received by those young people with the average pocket money enjoyed by children in families where everything is found, including food, accommodation and clothing. The average pocket money for a 12-year-old, according to a survey conducted by the Halifax building society, is £2·30 a week while for a 16-year-old it is £8·99. Therefore, the average

12-year-old receives in pocket money more than Tracy does after a full week's work on YTS. The new clause covers those who, in the Government's view, are essentially, necessarily and without any possible escape, living away from their parental homes.
The Government should consider the sobering example of what is happening in the United States—reference has already been made to that country. The changes that have taken place in Britain in the past few years parallel those that have occurred in the United States, which is suffering a peculiar anguish of 3 million tent people, homeless, itinerant street dwellers who have been rejected by the state and who are despised by society. Many of those people started life in care and many suffer from all kinds of inadequacies, especially from forms of mental illness. President Bush has said that they represent the nation's shame. There are 3 million of them. They are the walking wounded, the casualties of a social security system that has been wrecked by the same mean-spirited forces of malice and ignorance and neglect that have corrupted the judgment of the Government. Visitors to the United States ask how unimaginable wealth can live as a close neighbour to such poverty.
Earlier today, the hon. Member for Lewisham, West (Mr. Maples) asked what would happen if someone from another planet came to study our social security system. A year ago someone from another world, the Third world, came to London. Mother Theresa wept on the streets of our capital. In a society where the average family is as rich, or has command over as many resources, as a Tudor monarch, we consciously fail our more susceptible young people. They are the very people who have been spurned by their parents from early childhood, as well as those who have endured the long, hideous nightmare of parental abuse. From birth, many of them have been cheated by nature or short-changed by life. They are the embittered, bewildered, frightened victims of society who deserve better than the Hobson's choice that we give them of poverty, or drugs, begging, crime and prostitution.
I appeal to the Government and to the House to listen to the voices of good people who are crying out to us to stop adding to the physical and emotional turmoil of adolescence the cruel, ugly and unnecessary burden of destitution.

Mr. Kirkwood: I support the new clause that has been ably moved by the hon. Member for Newport, West (Mr. Flynn). I wish to address my remarks to amendment No. 106 which stands in my name and which deals with a slightly different but related topic—the financial plight of people who must live in bed-and-breakfast accommodation. The amendment seeks to provide a special level of income support for people living in such accommodation and similar lodgings. In consultation with housing pressure groups, particularly Shelter, I am extremely worried that the changes for boarders introduced a fortnight ago on 10 April could have a potentially disastrous effect on the health and well-being of homeless families.
The changes effectively abolish the so-called "eating out" allowances which families in bed-and-breakfast have relied upon to supplement their incomes. Many families in such accommodation have totally inadequate cooking facilities and are forced to exist on take-away food which, as we all know, is extremely expensive.
It is right that the House should spend some time considering the changes with a view to putting right some of the anticipated difficulties before they cause more trouble than they already have. On 10 April, housing costs for boarders—those living in bed-and-breakfast accommodation, hotels, in lodgings and in so-called "supportive lodgings"—were switched away from income support to housing benefit. Residents of hostel accommodation will he transferred to that new regime in October.
These changes have been designed to rationalise the situation and to place boarders on the same footing as people in self-contained and permanent accommodation. Until April and under the old system boarders received a higher rate of income support, including a payment for meals or the eating out allowance to which I referred earlier. That was designed to compensate for the lack of proper cooking facilities in many bed-and-breakfast establishments. Eating out allowances have now been abolished, so boarders receive the same rates of income support and personal allowances as all other claimants and they may also have to meet certain amenity charges out of their own income support that are not catered for by housing benefits.
It is worth considering the definition of "boarder". For social security purposes, the term "boarder" is not related to security of tenure or to the occupation of any particular type of accommodation. For example, there are circumstances in which an assured or an assured shorthold English tenant, as well as licensees, can all be considered as boarders and accordingly get support. Income support regulations state that a boarder is a person who does not live with a close relative and pays an exclusive charge for accommodation and some meals or lives in a hotel, guest house, lodging house or similar establishment. Essentially the test is commercial.

Sir William Clark: Is the hon. Gentleman reading a brief?

Mr. Kirkwood: The hon. Gentleman says that I am reading a brief. I am reading very carefully the representations put forward by Shelter because they are technical and difficult to understand. I make no apology for doing that, because these changes will have serious financial effects. Many people have to live in this sort of accommodation. I am therefore anxious for the House to hear about the details of the old system and of the new system.

Mr. Corbyn: Would it not be helpful for Conservative Members who are making half-baked remarks to read the details of the Bill so that they might realise how horrific it is for young people who are seeking to live independently rather than being put in danger of risk by this proposal?

Mr. Kirkwood: I believe that that would be a considerable advance, but I do not think it is likely to happen. I was saying that the test of who and who is not a boarder is essentially commercial. Two of the clauses in my proposed amendment No. 106 seek to rearrange the definition of a boarder. I refer particularly to the definition of "supportive lodgings". As I can find no definition of that term in the regulations, I should be obliged if the Minister of State could supply information on that. For example, the Department of Social Security intends to embrace adult care placements. The case of someone placed with an ordinary family which provides a degree of

personal care and assistance is to be included in that category. I do not believe that such schemes have to be registered by the local authorities, and I am worried about this aspect. I may be wrong, and I hope that the Minister will clarify the situation.
The changes that affect people's incomes which were introduced on 10 April altered the previous situation which allowed a weekly income support payment to be paid to a boarder made up of three basic elements: an accommodation charge; a meals eating out allowance; and a personal allowance. Under the old system, the accommodation charge covered the weekly cost of board and lodgings. The meals allowance covered the cost of extra meals not included in the weekly charges, and that was made up either of the cost of the meals or the daily charges set out—£1·10 for breakfast, £1·55 for lunch, and £1·55 for an evening meal. A total weekly allowance, excluding breakfast, amounted to £21·70. That is a substantial sum on which people in bed-and-breakfast accommodation substantially relied.
In addition, there are personal allowances. That for a single person is £10·30, and that was doubled for a couple and less for dependent children. Any person who satisfied the conditions for income support premium would have received the full sum of £11·50 for a personal allowance. The personal allowances for those in bed-and-breakfast accommodation were smaller.
On top of that there were ceilings on board and lodging charges and accommodation charge and meals allowance were subject to regional maximums. In my constituency, it was £55 and in London it is £70 for a single person. The sums for those under 25 were subject to time limits and that caused all sorts of legal difficulties and the Government kept having to change the rules of the game. Boarders were not eligible to receive additional income support payments.

It being Ten o'clock, the debate stood adjourned.

Ordered, That at this day's sitting, the Social Security Bill may be proceeded with, though opposed, until any hour.—[Mr. Kenneth Carlisle.]

As amended (in the Standing Committee), again considered.

Question again proposed, That the clause be read a Second time.

Mr. Kirkwood: From 10 April, boarders will receive an income support personal allowance and housing benefit. That will lead to a substantial drop in income for most boarders, particularly homeless families in bed and breakfast. Under income support, personal allowances are flat rate and are paid regardless of differences in personal circumstances. The premiums will be paid where appropriate, but will not be adequate to compensate for the loss of eating out allowance. Income could be further reduced if families are expected to pay any immediate amenity charges to their hotel.
The new rate of income support personal allowance is £20·80 for a single person aged under 18. There are higher rates for those between 18 and 24 and a rate of £34·90 for those aged 25 or over. The lone parent is expected to live on £20·80, a couple both aged under 18 on £41·60 and a couple with at least one over-l8-year-old £54·80, with additions for children or young people.
I understand that the time limit for boarders under 25 has been abolished. Income support changes are severe enough but, taken together with housing benefit changes,


they are worse. There are two kinds of housing benefit changes. First, the rent allowance will be applied to private or housing association tenants and there will be different rent rebates for council tenants. Housing benefit will cover only eligible rent and rates, so that some charges included in rents will be excluded when calculating benefit. These charges must be met from the weekly income support. As if these housing benefit changes were not enough, the ineligible charges also include 20 per cent. poll tax charges and 20 per cent. general rate and water rate charges.
These changes in the housing benefit allowances and rebates will have a severe effect. In addition, local authorities must make weekly deductions for meals when paying rent allowances or rebates. For members of the household aged over 16, deductions of £12·50 have to be made. For those aged under 16, the deduction is £6·25. Is addition, there are fuel deductions. If one room is occupied, £4·20 has to be deducted for heating, hot water and lighting, and for more than one room the sum is £7. In addition, there are other services, the most common being those for cleaning and laundry, for which deductions will be made.
When we examine how the changes will affect the income of boarders, we have to examine the effect that the changes will have when the boarders are split into those who are receiving either rent allowances or rent rebates. In the former group, claimants who move into bed-and-breakfast accommodation after 10 April will be referred to the rent officer, who will assess whether they are paying an unreasonably high rent for housing benefit subsidy purposes and also whether the accommodation is too large.
The space standards applied by rent officers are fairly restrictive—children of the same sex may have to share a bedroom. Local authorities will receive no subsidy for housing benefit paid out above the rent officer's assessment. Some local authorities will therefore be unable or will refuse to pay housing benefit on rent at that level, and boarders will be left to meet the difference themselves. I understand that a 50 per cent. subsidy is payable in some circumstances when some of the housing benefit regulations apply.
Rent rebate claimants will not be referred to the rent officer in that way. It must be noted that the DSS has confirmed that housing benefit claims from homeless families that are placed in bed-and-breakfast accommodation by local authorities will legally be treated as rent rebates. That is to say that, as with council tenants, rents will be paid by homeless families to a local authority, which will be entitled to make a reasonable charge for accommodation.
These cases cannot be referred to the rent officer as can those involving private tenants, but the DSS has announced that subsidy limits are to be imposed by using the rent threshold limits which were brought into force in 1988. They will continue to apply to tenancies which commence before this April. When a local authority places a family in bed-and-breakfast accommodation outside its area, the threshold that applies is that of the placing authority. Authorities will receive maximum subsidies up to the rent threshold and thereafter only a 25 per cent. subsidy.

Sir William Clark: rose—

Mr. Kirkwood: The hon. Gentleman need not bother to interrupt to say that I am reading and to complain. He can make his own speech. I make absolutely no apology for ensuring that some of the details of these changes are put on the record accurately.

Sir William Clark: On a point of order, Madam Deputy Speaker. Is it not a tradition of the House that, although a Back Bencher can refer to notes, he should not read his speech verbatim? The hon. Gentleman has been speaking for some time and he has been reading. Has the tradition been changed?

Madam Deputy Speaker (Miss Betty Boothroyd): The hon. Gentleman knows that there is no Standing Order that governs speeches. I have noticed that the hon, Member for Roxburgh and Berwickshire (Mr. Kirkwood) has been making copious use of his notes which, according to tradition, is not done in the House. If, however, he insists on making copious use of his notes, there is nothing that the Chair can do about it. I hope that he will bring his remarks to a speedy conclusion.

Mr. Kirkwood: Of course I shall respond to that, Madam Deputy Speaker. I have three other points to make. I hope that the hon. Member for Croydon, South (Sir W. Clark) will listen carefully.
A couple with two children—I am reading, carefully —aged nine and seven will lose £31·90 a week as a result of the changes of a fortnight ago. Secondly, a couple with four children aged three, seven, 11 and 12 will lose £51·20 —carefully read from the notes—and, thirdly, a person aged 19 will lose £4·60 a week under the new system. That also is carefully read from the notes. I hope that the hon. Gentleman understands the effect that the changes will have on such people.

Mrs. Rosie Barnes: I want to be brief. The case for new clause 6 and amendment No. 106 has been made very eloquently.
Many young people aged 16 and 17, through no fault of their own, cannot live with their parents, because they do not have parents, because they have parents who have not acknowledged them for many years or because they have been rejected by a step-parent on remarriage. An increasing number of marriages break down. Remarriages take place and young people are rejected by step-parents. Very often, the dominant male insists that a young person leaves home. Such young people are very vulnerable.
I read the figures very carefully and found them quite convincing. Many young people simply do not have enough to live on. They do not have enough to feed themselves and they certainly do not have enough to clothe themselves or buy their own toiletries. Let us not mince words. Young people, particularly girls, have to provide certain essential toiletries. We are not talking about perfume behind the ears, although I believe that 16 to 17-year-olds are entitled to a little luxury.
As the mother of teenage children, I know how much they spend on hamburgers, tapes and detailed accessories when their food, accommodation, hot water and home comforts are provided. We have to examine seriously the amounts of money being made available to young people. I welcome the changes which have already been made, but, looking carefully at case studies which have been sent to us by various responsible bodies, we have to acknowledge that young people will be short of basic essentials,


including food. Unless we do something, those young people will get into serious trouble. They will have to turn to crime or prostitution to make ends meet. If they go to work, on the amount that they receive at present, they will not have enough money to pay their fares for the whole week, they will become poor employees and stand to lose their jobs through no fault of their own. We have to take the matter very seriously. It is our duty to address the situation and remedy the financial problems faced by many young people.

Mr. Bill Michie: I shall not read copiously from my notes because for most of the time I cannot read my own handwriting. I have also put my finger on my glasses and cannot see out of them.
We are discussing a very serious subject, which I am sure most hon. Members have encountered in their surgery—the most vulnerable group of people in Britain today. To say that those young people have homes, accommodation or other support is nonsense. For any Administration to ignore the experience that has been drawn to their attention in the past few years, and the fact that those young people are vulnerable and independent in the sense that they are living in isolation and then to assume that they can get care, attention and resources from other sources is tantamount to criminality.
All right hon. and hon. Members must at some time have come face to face with cases which have been created by recent legislation. People say that the poor are with us all the time. Of course they are, but, unfortunately, various social security Bills in the past few years have created a new poverty for young people. All the voluntary groups and most local authorities have given chapter and verse to the suffering that continues today. Sometimes accommodation can be found. I am sure that we have all had cases for whom we have been delighted to find accommodation. At one time that would have been the end of the problem, but nowadays it is only the start. Often, those people are provided with four walls, a roof and a door, but nothing else. Many single payments have been abolished and other resources are no longer available.
We have all heard reports about key money, deposits and so on. In my constituency this morning a young man told me that he had found accommodation—I will check this with the Minister in writing—but that even the electricity board is asking for a deposit because he has never before been registered as a consumer and it wants some form of guarantee. That is yet another burden for people who are already in a mess.
10.15 pm
It is wrong to assume that, because of their age, young people can find income or resources from some other source. I do not think that new clause 6 goes far enough, but obviously we will support it. Whether young or old, people living independently and with no resources should receive equal treatment. Whether one is 16 or 30, the price of food and electricity is the same. To assume that for some strange reason a young person who has even less experience of how to manage can make do with fewer resources is beyond comprehension. In fact, it should be the other way round. Young people with no experience need extra support. They should not be fined or penalised because of their age.
There is a case in my constituency—I shall not dwell on it—of a 16 or 17-year-old girl who is pregnant. She was found accommodation—it is not very good, but it is better than nothing. Her general practitioner and the doctor dealing with her at the hospital insisted that she leave her previous house because she had been subjected to sexual abuse year after year. It is an impossible situation. However, just removing that young person from that house does not solve her problems. If anything, it creates more problems. Because of her young age, she does not qualify for the benefits that older people would receive automatically.
Last Wednesday, thanks to the Methodist Church, I had the privilege—if that is the right term—of visiting some London hostels. It was traumatic in many ways. The Methodist Church is doing a good job within its limitations. It wanted Members of Parliament from all parties to visit the hostels and I spent most of my time in Lambeth. Despite the love and care that the ordinary authorities and charitable organisations provide, there is no way that they can resolve all the problems. They are basically keeping the young people's heads just above water. The legislation is making matters worse. The plight of those people is desperate and I am sure that anyone who is aware of it, no matter how hard-hearted they may be, must be touched by it. They are the most vulnerable people in our society.
No one can deny that, although the caring services do a good job for such people, they do not have the necessary resources and should not have the ultimate responsibility. The legislation passed by the Government has been partly responsible for the problems and only the Government can change that. New clause 6 attempts to go some way along that road, but not as far as most of us would like. It is an extremely modest clause and I hope that the Government will read, understand and accept it. They should listen not just to me and my colleagues but to the voluntary organisations and other groups that have been pleading for months for some change which will help those in desperate need. We cannot justify passing legislation that allows young people to continue to exist in a living hell.

Mr. Brian Wilson: It is significant that all we heard from Conservative Members was a point of pedantry rather than anything to do with the substance of these serious matters.
I support new clause 6, which was eloquently moved by my hon. Friend the Member for Newport, West (Mr. Flynn). I shall focus especially on the problems faced by 16 and 17-year-olds who have been robbed of every penny of income by the Government.

Mr. Favell: I have never heard so much rubbish. Is the hon. Gentleman suggesting that a 16 or 17-year-old should be able to live in semi-luxury without training or trying to find a job? The Opposition, by encouraging this idleness, are not doing young people any favours whatever.

Mr. Wilson: I am delighted that I allowed the hon. Gentleman to intervene. I am reminded of the old maxim, "All you expect from a pig is a grunt." The hon. Gentleman eloquently gave the true views of Tory Members, and I hope that in the days and weeks before the county council elections his words will be well trailed around England and Wales. There spoke the true voice of Toryism. We shall hear later from the Minister for Social Security, the polite face of Toryism. It will be interesting to


see whether he dissociates himself from those remarks. It will be interesting to hear whether the Minister for Social Security, who trails his wet reputation round the dinner tables of Kensington and Chelsea, shares his hon. Friend's views of 16 and 17-year-olds living in semi-luxury.
The Government have made a modest retreat on the treatment of some 16 and 17-year-olds. When I raised the subject in an Adjournment debate last December there was no evidence of any Government awareness of the need to retreat. On the contrary, the strong impression given by the Minister was that he was doing the 16 and 17-year-olds from whom he had robbed every penny of income a favour. He told the House that there was
nothing more debilitating for the mass of youngsters leaving education and entering the adult world than to have automatically to depend on state benefits.
We were not talking then, and we are not now, about the mass of youngsters. By national standards, we are talking of relatively few youngsters. It is more debilitating for 16 and 17-year-old youngsters leaving education and entering the adult world to have no state benefit, no job, no training and not a penny of legal income on which to depend than a few pathetic pounds of state benefit on which to subsist.
The philanthropist Minister, who was saying that he was doing youngsters a favour, continued:
I can think of no greater danger than for young people to be attracted to leave home and have the opportunity to live on state benefits and come into some sort of life in inner London or any of our other big cities and be exposed to the dangers, moral and otherwise, that can confront them.
The Minister is a positive salvationist, but I tell him that there is one bigger danger than having to live on state benefit in inner-London facing moral dangers—to live on no state benefit in inner-London or other big cities facing moral dangers.

Mr. Favell: Will the hon. Gentleman give way?

Mr. Wilson: Get out of my road. Very well, I give way.

Mr. Favell: Is the hon. Gentleman honestly suggesting that an able-bodied person of 16 or 17 cannot get a job in central London? I could find that person a job within five minutes if he really wanted one.

Mr. Bob Cryer: Another little gem.

Mr. Wilson: Another little gem. It is on the record.

Mr. Battle: Conservative Members seem to think that youngsters have a life of semi-luxury on the streets of London. My hon. Friend may care to remind the hon. Member for Stockport (Mr. Favell) of what happens. I bumped into a youngster and asked him why he was sleeping out in London. He said that he had a job but one reason why he had to live out was that he could not even raise the deposit to rent a flat. He had to work for eight weeks before he could get the income to rent a flat. Perhaps Conservative Members do not reflect on what is happening in our society.

Mr. Wilson: My hon. Friend's point is well taken.
On 5 December the Minister went on very much in the same vein as the hon. Member for Stockport (Mr. Favell).
He declared:
All that young people have lost as a result of the implementation of the new arrangements is the option of doing nothing at the public's expense."—[Official Report, 5 December 1988; Vol. 143, c. 146–47.]

That was and is a lie of Goebbelian proportions. In many parts of the country there is no option of work or training. The youngsters who have been robbed of every penny of their income and forced into dire circumstances have been treated callously. It is almost beyond belief that any society could treat its youngest and most vulnerable members in that way as they enter the adult world.
The consequences are all around us to be seen. Unfortunately, we cannot get statistics. Part of the Government's trick is that by depriving youngsters of a legal existence and making them ineligible for benefit, those people no longer have to be counted. It is a double benefit from the Government's point of view. Tens of thousands of youngsters who lost all entitlement to income when these measures were introduced no longer feature in the unemployment count. Every month we hear that unemployment has fallen by so many thousands, but, especially when there is a new wave of school leavers, the figures include many youngsters who have lost entitlement to benefit because they are 16 or 17. The Minister is responsible for that.
What is the position of 16 or 17-year-olds who find themselves without a penny of income? They seek advice, thinking that surely this cannot happen to them. Nine times out of 10, social security offices and others tell them that because they are 16 or 17 they have no means of appeal and no entitlement. In rare cases they are given the correct advice, which is that any 16 or 17-year-old can appeal on the ground of severe hardship. They will not normally get that advice from the offices for which the Minister is responsible. Those youngsters are presented with a 15-page form to fill in. I know of several youngsters who have made eloquent testimony of their circumstances and have described the poverty, misery and hopelessness in which they live, but, because they have failed to use the magic words "severe hardship", their applications are automatically rejected. That is a splendid trick for the Minister to pull on these 16 and 17-year-olds. Even if youngsters get through that 15-page form, the likelihood of their getting beyond that form is remote. The Government cynically count on that.
I urge all 16 and 17-year-olds who have been robbed by the Minister of every penny of their legal income to get the necessary information to lodge appeals on the ground of severe hardship. When, for some spurious reason, their appeals are turned down, as they will be, they should seek legal advice to challenge the grounds on which the decision was taken. Perhaps the trick can be turned back on the Minister: because those youngsters have been left without a penny of legal income, by definition they will qualify for legal aid. They should take their case to the courts and large numbers should challenge the Minister on his Department's actions. I hope that that piece of practical advice will go out to 16 and 17-year-olds.
10.30 pm
The vast majority of Conservative Members, unaware of what is happening in large parts of the areas that they represent and among large social groupings in those areas, will be unaware, too, of cases that have arisen. I want to cite one example from my constituency, to make the Minister aware of what his handiwork has meant in human terms. It concerns a 16-year-old who left school last August. He lived—as many do—in very poor circumstances. He came from a low-income, single-parent family struggling to make ends meet. He lived in an area


in which there are no YTS places and no pretence of YTS places so when the bridging allowance ran out he was not offered a YTS place, but he was disqualified from benefit. He became one of the tens of thousands of youngsters in Britain who are left without a penny of income.
After being disqualified from benefits, he made a mistake. The House will agree that 16-year-olds sometimes make mistakes and that they should pay for them with rather less harsh penalties than my constituent paid. When 16-year-olds at public school make mistakes, they are called jolly japes. This lad's mistake was to pilfer from his mother's purse. Perhaps 16-year-olds with no money and no access to money sometimes do things like that. He was put out of his family home in the extreme circumstances that I have described. He then lived rough—[Interruption.] I hear sniggers from the Tory Benches. He lived rough for several weeks—in hedgerows and in haylofts.
He became involved with a family of experienced criminals. He was then used, Fagin-like, to steal for his keep. That was in December and January. A few weeks ago, he was united with his mother and is back in the family home, still without a penny of income. He has now paid the price for his activities in December and January: he was taken to court and sentenced to three months' detention for the petty thieving offences from which, as the court recognised, he gained no personal benefit. He stole for his keep because he had no money and had no home. It was the Government who put him in that position.
All of that was utterly predictable. Any fool can see —and the Minister can see—that if one condemns tens of thousands of youngsters to living without a penny of income, many of them will, as night follows day, find themselves in circumstances that are a threat to their morals and to their well-being, but, above all, to the possibility of their ever having a decent life.
In the name of any humanity that may exist in Britain, give us an assurance tonight that no 16 or 17-year-old will be left in the streets or the hedgerows or the haylofts without a penny of income.

Mr. Corbyn: Tonight in London it is an ordinary wet miserable night. Earlier this evening I went to a meeting at the London School of Economics. On my way back, I counted the number of people getting ready to spend the night on the pavement in Arundel place, just in sight of the Savoy hotel, where a room costs £400 a night. Just before 9 o'clock there were already 12 people getting ready to spend the night in sight of the Savoy and just near the law courts.
When I go home there will be more than a dozen people begging for money outside Finsbury Park station near to where I live. There will be young people begging so that they can exist in this city.
Tomorrow, at a convent near my home, a pathetic stream of half a dozen or a dozen—it is sometimes more —will be asking the nuns for a cup of tea and a piece of bread and butter. That is a normal night and a normal day in this city at this time.

Dame Elaine Kellett-Bowman: The hon. Gentleman mentioned the Savoy hotel. Some years ago, I was the chairman of a welfare committee in Camden. As such, I was in charge of a common lodging house in Parker street.

The deputy head chef of the Savoy was one who went there from choice. He could certainly have chosen to go elsewhere.

Mr. Corbyn: I am not quite sure what that intervention adds to the sum total of human knowledge. The hon. Lady was not in her place earlier in the discussion. I was not talking about the chef at the Savoy. I was making a comparison between the poor people who sleep in the streets and the people who walk past them to spend £400 for one night in the Savoy hotel. If the hon. Lady does not understand the difference between what I was saying and what she is thinking, heaven help us all.
We have an appalling problem of homelessness and destitution among young people in London. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) spoke about the plight of young people being forced into crime and all sorts of indignities to make ends meet. That is happening all the time in London. They are young people—some from London, some from outside London, some from institutions, and some from what one would call normal family homes. Eventually, the disputes with parents become worse and worse, because the flat is overcrowded, and because a younger child wants the bedroom. All the pressures and tensions build up, and we end up with young people out on the streets.
If they are out on the streets, sleeping rough and looking dishevelled, it is difficult for them to get a job. It is difficult to get a job if they have no address and they cannot say where they live in the first place. They get into a cycle of despair. The ways out of that cycle of despair are often crime, drugs, prostitution, and so on. That is happening now in this city. Complacent Conservative Members choose to ignore it, to wish it away, and to decide that it is the problem of a few feckless youths who are trying to fiddle the social security system. They are creating a crisis of unimaginable proportions.
If Conservative Members bother tonight to go to Waterloo station or Charing Cross and to walk around, they will not find that only old tramps sleep there. Often quite young people are there. They should go to Crisis at Christmas. They will find that every year a growing proportion of people there are under the age of 25. These are signs of a real crisis in our society.
What is the Government's response? They say that under 25-year-olds should be partly dependent on their parents and that, if they are trying to live independently, they should get less than those over the age of 25. The same Government are making large cuts by closing long-stay institutions of various sorts. In some ways, some of us welcome closures of long-stay institutions, provided that they are compensated for by real spending on real community care that gives real support, and provided that we do not ignore people and leave them to try to fend for themselves, often in a vulnerable situation.

Mr. Jack Thompson: Is my hon. Friend aware that, last year, Centrepoint, a charity in Soho in London, said that its research showed that, each year. 30,000 young people from the north of England come to London simply because there are no jobs in the north? They are trapped into lower-paid jobs in London where they cannot pay for their accommodation.

Mr. Corbyn: My hon. Friend made a valid and correct point. I and many other London hon. Members regularly meet young people in our surgeries. They have been unable


to get jobs in the north or other parts of the country—not through any fault or lack of effort on their part. Often, they have tried hard at school and at any educational opportunities that are offered to them.
Young people cannot get work so, not unreasonably, they come to London. Even if they can find jobs, which is difficult, they cannot find anywhere to live. They then go to Centrepoint where they are told that there are thousands like them and they cannot be helped. They traipse around advice bureaux, crisis centres and Members' surgeries. At every turn they are told "No".
All the London local authorities have appalling housing crises. On average every London borough has a waiting list of between 5,000 and 10,000. Those young people are not eligible to be rehoused under the homeless persons legislation unless they can be judged to be totally vulnerable, which many of them are. It is often claimed that they are intentionally homeless when they seek rehousing. Those young people either have to go back home to a part of the country where there is no work and where the family is often in such a tight spot that it cannot cope with the young person's return, or they end up trying to fend for themselves on the streets of London.
This Government are creating a generation of criminals by forcing people into crime because of the social conditions that prevail in this country. Conservative Members should consider what they are doing in relation to this particularly nasty piece of social security legislation which builds on something which was even nastier two years ago.
There is no shortage of money in this country. There is no shortage of resources to ensure that everyone has a roof over their heads and that every unemployed and homeless person has sufficient income to keep body and soul together. There is a political will not to provide it. That is the problem.
With regard to independent living, the 1985 Green Paper entitled "Reform of Social Security" states:
it is clear that at the age of 18 the majority of claimants are not fully independent and that the great majority of claimants above the age 25 are…In 1983 nearly 90 per cent. of all claimants over 25 were getting the higher household rate. By contrast the clear majority of claimants under 25 were living in someone else's household. The Government have concluded that an appropriate dividing line is age 25.
If ever there were a self-fulfilling prophecy that is it. Of course the majority of young people are living in someone else's household—they cannot afford to live anywhere else. Sometimes they are more or less sleeping on floors. The Government have decided that the age of 25 should represent entitlement to a lower benefit level than that available to those over 25.
I agree with my hon. Friend the Member for Sheffield, Heeley (Mr. Michie). The new clause is limited because it does not go as far as I would like. There should be equality of payment for all people adjudged to be living independently, whether they be over 25 or under.
I conclude by considering the question of income support for young people aged 19 who are trying to complete secondary education, but are estranged from their parents and receive no income support and are therefore unable to continue their education.
I have received a letter from the Minister about a constituent of mine whose name I will not refer to because that would be unfair to her. The Minister wrote:

Thank you for your letter about…a nineteen year old student estranged from her parents and is no longer entitled to Income Support.
I sympathise with her position but I am afraid that extra-statutory payments can be made only where claimants are deprived of all or part of their entitlement in a way not foreseen or intended when the law was drawn up. This is not the case here, so a payment would not be in order.
Of course it could not have been foreseen when the law was drawn up that this particular young person would reach such a pass in her relationship with her parents that they would throw her out. However, it falls on the social security system to support her now that she has been thrown out, to allow her to complete her education and develop her abilities to the full. The same does not apply to the children of very wealthy parents who do not get thrown out. They do not get into those disputes or have those problems. They have a family safety-net. There is no such safety-net for people like my constituent.
I hope that for once the House will recognise that many of the social problems facing young people today have been created by the social security legislation which deliberately ignores them. I hope that hon. Members will at least support the new clause as going some way towards alleviating the misery of those young people as it gives them the support, resources and recognition by society that they crave and which we should give them.

Mr. Seamus Mallon: Until I heard the intervention of the hon. Member for Stockport (Mr. Favell) I had not intended to contribute to this debate. The hon. Gentleman's inspired prejudice will have touched many hon. Members very deeply—in such a way, indeed, that they may have second thoughts about their intentions in relation to the new clause.
The acid test of the maturity of any society in the world is the way in which it looks after those who are most vulnerable—by definition, surely, the aged and those who are not fully come of age. Since time began, there has never been a decade—indeed, there has never been a century —when young people did not find themselves in the type of situation that hon. Members have cited tonight. I will not tabulate cases; suffice it is say that we can all cast our minds back to the story of the prodigal son, from which there is a lesson to be learnt. The choice facing that father was whether to allow his son to continue on the prodigal road or to bring him back into society by adopting a humanitarian attitude such as we are not seeing here tonight.
It is a characteristic not of this generation or of this decade, but of the human condition, that young people will always find themselves in a position of vulnerability, wanting to assert their independence. There are three groups of such young people. First, there are those who have to leave home because of various circumstances there, some of which have been mentioned by hon. Members—child abuse, alienation from parents, or whatever. In any case, it is imperative that they leave home because they have no control over the circumstances. Very often young people, in order to protect what society cannot protect for them, find themselves with no alternative to taking steps that will make them homeless. Society owes a debt to those young people. They are entitled to the protection of society because they are at


risk, and if society does not give them that protection it is demonstrating the callousness that this legislation represents.
The second vulnerable group of young people are those who wish to assert their independence. I am sure that there is not in this House a parent who has not seen a child take the tent into the garden to show that he can stand on his own feet. Such people will come back into society if society helps them back. But they are at a crossroads; they can either turn towards the type of life that hon. Members have illustrated, or return to society, more mature from the experience of having lived away from home.
The third vulnerable group must surely be those who are physically, emotionally or psychologically scarred by experiences at school, within the family, or otherwise in their own environment. We cannot allow those people to go unaided. Staying in their situation of vulnerability can only lead to further problems.
I realise that in the cause of people like the hon. Member for Stockport I will not be able to appeal to humanitarian considerations, so perhaps I should appeal to the calculating machines that sometimes masquerade as their minds. What is the net cost of this attitude? What is the cost of recycling the problems from one decade to the next? What is the cost in terms of keeping people in prison and other institutions, of keeping people on the verge between being law-abiding citizens and being law breakers? The net cost of such an approach is quantifiable and is something that the hon. Member for Stockport might understand.
The recycling effect is very serious indeed—not just for the young people, not just for others affected by their lives, not just for the parents, not just for the immediate environment, but for the whole of society, which adopts the faulty premise that if people are left on the dunghill the height of the dunghill will somehow be lessened.
A serious principle is at stake. It is based on the choice of the type of society that we want to create and sustain. Is it a society which will honour its commitments and responsibility to the most vulnerable or one that will work on a false premise? There is a false premise in the legislation. It is the notion that leaving people to stand on

their own two feet, cold baths, bodily exercise and a little starvation will put the matter right. It does not. We have centuries of experience to show that it does not. It simply exacerbates the problem and recycles the difficulties that our young people are facing now.
Those young people in every city and in rural areas could well be guided into productive lives if a humanitarian approach were adopted by the caring services and in this legislation. If we have this cold, callous heartlessness in our legislation, it must reflect a cold, callous heartlessness in our legislators. We are the legislators. Is that the type of condition that we want to recycle for further generations?

Mr. Favell: I shall be brief, but I must reply to that attack.
I have nothing against young people standing on their own two feet. My objection is to encouraging young people to stand on the state's two feet. That is precisely what the Opposition have been trying to encourage for years. For a long time the Labour party encouraged young people to think that they could leave school at 16, go immediately into accommodation provided by the state and live on the state, rather than look for a job or even train for one. That was not in the long-term interests of young people.
I remember early after my election a lady coming to my surgery and saying, "Mr. Favell, I have a daughter of 16. She is being encouraged into idleness and immorality by the state. She has left a perfectly good home and set up home with a young man who is also 16. She is living in luxury and has no intention of getting a job. What is the state doing?" I have heard that story over and over again. I am glad that the Government have grasped the nettle and are insisting that young people find a job, if possible, and are not encouraged to think that they can live on the state for ever and a day.
In many areas young women have illegitimate children and those children are condemned to the same cycle of deprivation as their mothers. That should be discouraged. My hon. Friend the Minister for Social Security is doing exactly the right thing in discouraging such behaviour.

The Minister for Social Security (Mr. Nicholas Scott): I must take issue with the hon. Member for Newry and Armagh (Mr. Mallon). He cited the parable of the prodigal son, but he seemed to get it on its head. The prodigal son left with plenty of capital, blew the lot and went back to the bosom of his family where he was welcomed back. He certainly did not have the opportunity to live on state benefits when he was away from home.
I assure the hon. Gentleman that we seek to ensure that, whatever changes we make in the provision for young people, the most vulnerable are given special protection. I hope that I can persuade the House that that is exactly what the Government are doing. I am absolutely certain —I echo the point made by my hon. Friend the Member for Stockport (Mr. Favell)—that the state should not be seen to encourage or give a perverse incentive to young people to leave home.

Mrs. Gwyneth Dunwoody: Disgraceful.

Mr. Scott: Perhaps the hon. Lady would allow me to develop the argument before she decides whether what I shall say is disgraceful. I represent part of London which under Conservative and Labour Governments has seen the problems of young people. They come to London and chance their luck, and I have seen the dangers and difficulties with which they can be confronted.

Mrs. Dunwoody: Does the Minister ever ask why those children come to London? It was clear from a survey that I carried out on homosexuality and on the use of small boys for male prostitution that many of those children were driven out of existing homes by the conditions and the abuses that they there suffered. Will the Minister not use as an excuse the suggestion that all those who come to London are driven here by some extraordinary greed for the future? Will he not accept that many of them are driven out by things that none of us would accept for our children or for anyone else's?

Mr. Scott: I am sorry that I gave way to the hon. Lady. I hope that I shall be able to persuade the House that we have taken special account of young people who find themselves in the situation that the hon. Lady has described.
The hon. Member for Cunninghame, North (Mr. Wilson) did not speak to the new clause, but launched into a violent attack on the broad thrust of the Government's policy for 16 and 17-year-olds. I do not blame him for doing that, but I am confident that the broad thrust of the Government's policy is right. Many of his arguments during his passionate address to the House were based on emotion and prejudice rather than on the facts of the case. He talked about the lack of places on YTS. At the end of February there were virtually 144,000 unfilled places on YTS throughout the country, and an excess of places over demand in every region.

Mr. Wilson: Will the Minister accept that in February, in the Training Agency area which I represent, there were three times as many people seeking YTS places as there were places?

Mr. Scott: There was an excess of places in the region as a whole. If the hon. Gentleman would like to write to me with the figures, he will receive a considered response.
The hon. Member for Cunninghame, North spoke as though young people, when they asked for consideration under the severe hardship provisions, were inevitably turned down. From 12 September 1988—when the new system came into existence—up to 21 April, there were 7,464 decisions on severe hardship, and 4,839 of those were favourable, which is some 65 per cent. Those decisions are, therefore, taken on a fair and rational basis.

Mr. Wilson: rose—

Mr. Scott: The hon. Gentleman had his say. He gave the impresson that young people who came forward and pleaded severe hardship inevitably had their cases rejected out of hand. That is not true. Some two thirds of those who came forward were given a favourable decision.

Mr. Wilson: The Minister has confirmed my point with his figures, because 7,000 odd is a small number of young people to have claimed on grounds of severe hardship. Will the Minister join me in encouraging every 16 and 17-year-old who has had benefit taken away from him and who has been left with no means of income to appeal on grounds of severe hardship? If a person has no income, potentially he or she has severe hardship. In particular, will the Minister give a directive to every DSS office that in no circumstances must it tell or lead those youngsters to believe that they are disqualified from income support merely on the ground that they are 16 or 17-years-old?

Mr. Scott: Every 16 or 17-year-old is guaranteed the offer of a place on the youth training scheme. It is possible that some people, who have to live independently, may need to be considered under the severe hardship provisions. In those circumstances, I believe that it is right that we should look with compassion and sympathy at the circumstances that confront them. Two thirds of those who have come forward and who have asked for consideration have had a favourable response.
I am grateful for the Opposition's guarded welcome for the concessions for treating 16 and 17-year-olds that I was recently able to announce. The effect of the new clause is to give 16 and 17-year-olds who have no parents or who for a prescribed list of reasons are unable to live at home the over-25s rate of income support. The difference between us is not the treatment that should be accorded to those people, but the level of benefit to which they should be entitled. I believe that our list accords closely to the list that the hon. Member for Newport, West has in mind. Should such youngsters get the 18 to 24-year-olds rate of benefit or should they get the rate for those aged 25 and older? I shall advance a number of reasons why we should stay where we are in this regard.
First, we have only recently introduced the concessions that I was able to announce—[interruption.] When we introduced the reforms in April 1988 I undertook that we would carefully monitor their effect. One result of the monitoring has been the concessions that I have announced. We should wait to see how those concessions work out. I believe that the 18 to 24-year rate is appropriate for the youngsters in question.
Under-25s on income support get the personal allowance, £27·40. They also get housing benefit, 100 per cent. of their rent and 80 per cent. of their rates. I accept


that, having paid their housing costs, they are left with an amount that is not generous. I believe that it is adequate and I do not want to reach the situation where we restore the perverse incentive that existed before April 1988 for young people to leave home and seek to live independently when the vast majority of them should be given every encouragement to remain with their families.

Mr. Bill Michie: What is the difference between someone under-25 and someone over-25? The Government recognise that, at the age of 18, when called upon, one can don a uniform and die for one's country. For some strange reason, however, the Government do not recognise that person as an adult with the same problems as those over-25.

Mr. Scott: I believe that people aged 16 and 17 are more vulnerable and, as far as we can encourage them to do anything, they should be encouraged to stay within the bosom of their family.

Mr. Battle: Some cannot stay.

Mr. Scott: If they cannot, the hon. Gentleman knows full well that special arrangements are made for them.
There is a difference between the under-25s and the over-25s not least in their earning capacity. Young people under-25 earn a great deal less than those over-25 and most live in other people's households rather than independently. I do not want to return to the situation where we must reintroduce the complexities and difficulties of the householder test that existed before April 1988.
I accept that the arrangements that are made are not generous, but I believe that they are sufficient. We shall extend the provisions that are made during the child benefit extension period to include those who are genuinely estranged from their families. At the end of that period it will be possible, virtually automatic, for such cases to be considered under the severe hardship provisions should a youngster say that he still needs that help. It is right that that should happen.
We shall, of course, continue to monitor the impact of our changes. Such monitoring is not a one-off exercise but a continuing process. I pay warm tribute to the voluntary organisations which have helped to monitor the changes and which have given considered judgments about the cases they have identified. In part they led us to make the changes that we have announced.
The hon. Member for Newport, West raised the cases of Wilfred and Tracy, which were highlighted by the National Childrens Bureau. The House knows that I never comment in detail on the Floor of the House on individual cases that are brought forward because the facts underlying those cases may well turn out to be inaccurate. At first glance, the examples quoted by the National Childrens Bureau seem to have some inexplicable defects, but I should like to consider them rather more carefully and study the figures. I shall then respond to the National Childrens Bureau and, if necessary, will place the letter in the Library.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) spoke to amendment No. 106. I shall read his speech, as he did, and I shall study the details that he went over rather quickly. Whereas the new clause seeks to overturn something that has existed for just over a month, he is seeking to overturn an arrangement that has existed

for three weeks. We abolished the special rates, which were a carryover from the old board and lodging supplementary benefits scheme.
I believe that the old board and lodging system really provided an incentive for claimants and landlords 10 behave in a quite perverse manner. We know that some landlords who provided accommodation of this type used to hang signs in their windows saying "DHSS claimants only", because they could get from claimants on the board and lodging allowance rents they could not get from people in work, and they were prepared to specialise in this type of operation. Knowing that the claimants could get a benefit, landlords could make higher charges, often providing no extra services whatever and meals which were mere tokens. Claimants knew that they could get the personal allowance as well as the eating out allowance. The result was an explosion of this sort of provision, a trebling in only two years. It was therefore right to seek to change such a provision.
In essence, in the changes to the hostels and board and lodging areas we are attempting to provide that the social security system is neutral when it relates to the type of accommodation provided. Therefore, all claimants should have their housing cost met through the housing benefits system, and other needs met through income support. The amendment that the hon. Gentleman will be able to move on another day would negate the effect desired.
I also find it very difficult to support a system that encourages local authorities to provide bed-and-breakfast accommodation for homeless families. I do not believe that it is in the interests of the homeless families or of the local authorities concerned. Many boroughs are able to get by without using that sort of provision. By using short lease or short life property, they avoid resorting to bed-and-breakfast accommodation. That is the right way to go.
Of course, as we make the changes to board and lodging provisions, we are providing transitional protection for varying periods to the most vulnerable groups. I cannot ask the House to accept the amendment or the new clause.

Mr. Flynn: The Minister refers to perverse incentives for people to leave home. I recall the words of the Prime Minister who, after promising that all young people would have a YTS place to go to, when questioned about the many thousands of young people from many parts of the country who found they still had no YTS place after the bridging period, replied that places were available if they were prepared to leave home. Is that not a perverse incentive for people to leave home? The Minister should look at the Government's own regulations relating to non-dependent relatives. In such cases, a large deduction is made from the family housing benefit—another perverse incentive for people to leave home.
When referring in my opening remarks to the malice and ignorance of some Conservative Members, I thought that I might have overstated the case, but then I heard from the hon. Member for Stockport (Mr. Favell) the genuine voice of malice and ignorance that inspires the Government. The tabloid understanding of reality of Conservative Members has driven them to this extreme of using the device of poverty to force confused, unhappy, damaged young people to do the Government's bidding.
The Minister appears not to understand this clause. Many Labour Members have said that it does not go far


enough. There is a case for saying that there should not be a cut-off at the age of 25. There are no signs displayed in boarding houses stating that two rates apply to a flat—one for people older than 25, and one for younger people. In the supermarkets, there are not two prices for the groceries —one for the under-25s and one for the over-25s. The Government's policy is based on that irrationality.
We were practical and modest in framing the new clause. The people covered by it are those who will not be affected by any perverse desire to leave home and rush to the bright lights of Chelsea. They are specifically enumerated as those who have no homes to return to. They are married couples, people who have left home because of parental abuse, those who have never had a home, or have been in care for virtually all their lives, and those who are living away from the parental home for other reasons, perhaps because their parents cannot afford to support them as they are chronically sick or disabled.
There is no reason for the Minister to reject the new clause. Out duty is to cherish these young people, not to punish them. I urge my right hon. and hon. Friends to support the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 168, Noes 296.

Division No. 173]
[11.10 pm


AYES


Abbott, Ms Diane
Dewar, Donald


Adams, Allen (Paisley N)
Dixon, Don


Anderson, Donald
Dobson, Frank


Archer, Rt Hon Peter
Doran, Frank


Armstrong, Hilary
Duffy, A. E. P.


Ashley, Rt Hon Jack
Dunwoody, Hon Mrs Gwyneth


Ashton, Joe
Eadie, Alexander


Barnes, Harry (Derbyshire NE)
Evans, John (St Helens N)


Barnes, Mrs Rosie (Greenwich)
Ewing, Mrs Margaret (Moray)


Barron, Kevin
Faulds, Andrew


Battle, John
Fearn, Ronald


Beckett, Margaret
Field, Frank (Birkenhead)


Beith, A. J.
Fields, Terry (L'pool B G'n)


Bennett, A. F. (D'nt'n &amp; R'dish)
Flannery, Martin


Bermingham, Gerald
Flynn, Paul


Bidwell, Sydney
Foot, Rt Hon Michael


Blair, Tony
Foster, Derek


Blunkett, David
Foulkes, George


Boyes, Roland
Fraser, John


Bradley, Keith
Fyfe, Maria


Bray, Dr Jeremy
Galbraith, Sam


Brown, Gordon (D'mline E)
Galloway, George


Brown, Ron (Edinburgh Leith)
Garrett, John (Norwich South)


Buchan, Norman
Garrett, Ted (Wallsend)


Buckley, George J.
Golding, Mrs Llin


Callaghan, Jim
Gordon, Mildred


Campbell, Menzies (Fife NE)
Graham, Thomas


Campbell, Ron (Blyth Valley)
Griffiths, Nigel (Edinburgh S)


Campbell-Savours, D. N.
Grocott, Bruce


Carlile, Alex (Mont'g)
Hardy, Peter


Clark, Dr David (S Shields)
Henderson, Doug


Clarke, Tom (Monklands W)
Hinchliffe, David


Clwyd, Mrs Ann
Hogg, N. (C'nauld &amp; Kilsyth)


Cohen, Harry
Home Robertson, John


Cook, Robin (Livingston)
Hood, Jimmy


Corbett, Robin
Howells, Dr. Kim (Pontypridd)


Corbyn, Jeremy
Hoyle, Doug


Cox, Tom
Hughes, John (Coventry NE)


Crowther, Stan
Hughes, Robert (Aberdeen N)


Cryer, Bob
Hughes, Roy (Newport E)


Cummings, John
Hughes, Sean (Knowsley S)


Dalyell, Tam
Hughes, Simon (Southwark)


Darling, Alistair
Illsley, Eric


Davies, Rt Hon Denzil (Llanelli)
Ingram, Adam


Davis, Terry (B'ham Hodge H'I)
Janner, Greville





Kaufman, Rt Hon Gerald
Redmond, Martin


Kilfedder, James
Rees, Rt Hon Merlyn


Kinnock, Rt Hon Neil
Reid, Dr John


Kirkwood, Archy
Richardson, Jo


Lamond, James
Robertson, George


Lestor, Joan (Eccles)
Robinson, Geoffrey


Lewis, Terry
Rogers, Allan


Lofthouse, Geoffrey
Rooker, Jeff


Loyden, Eddie
Ross, Ernie (Dundee W)


McAllion, John
Ruddock, Joan


McAvoy, Thomas
Salmond, Alex


Macdonald, Calum A.
Sedgemore, Brian


McKelvey, William
Sheerman, Barry


McLeish, Henry
Sheldon, Rt Hon Robert


Madderr, Max
Skinner, Dennis


Mahon, Mrs Alice
Smith, Andrew (Oxford E)


Mallon, Seamus
Smith, C. (Isl'ton &amp; F'bury)


Marek, Dr John
Snape, Peter


Marshall, David (Shettleston)
Soley, Clive


Martlew, Eric
Spearing, Nigel


Maxton, John
Steinberg, Gerry


Meacher, Michael
Strang, Gavin


Meale, Alan
Straw, Jack


Michie, Bill (Sheffield Heeley)
Taylor, Matthew (Truro)


Mitchell, Austin (G't Grimsby)
Thompson, Jack (Wansbeck)


Moonie, Dr Lewis
Vaz, Keith


Morgan, Rhodri
Wall, Pat


Morley, Elliott
Wallace, James


Morris, Rt Hon A. (W'shawe)
Wareing, Robert N.


Murphy, Paul
Welsh, Andrew (Angus E)


Nellist, Dave
Wigley, Dafydd


Oakes, Rt Hon Gordon
Williams, Rt Hon Alan


O'Brien, William
Wilson, Brian


Parry, Robert
Winnick, David


Patchett, Terry
Wise, Mrs Audrey


Pendry, Tom
Wray, Jimmy


Pike, Peter L.
Young, David (Bolton SE)


Powell, Ray (Ogmore)



Prescott, John
Tellers for the Ayes:


Radice, Giles
Mr. Frank Haynes and


Randall, Stuart
Mr. Allen McKay.


NOES


Adley, Robert
Buck, Sir Antony


Aitken, Jonathan
Budgen, Nicholas


Alexander, Richard
Burns, Simon


Alison, Rt Hon Michael
Burt, Alistair


Allason, Rupert
Butcher, John


Amess, David
Butler, Chris


Amos, Alan
Butterfill, John


Arbuthnot, James
Carlisle, John, (Luton N)


Arnold, Jacques (Gravesham)
Carlisle, Kenneth (Lincoln)


Arnold, Tom (Hazel Grove)
Carrington, Matthew


Ashby, David
Carttiss, Michael


Aspinwall, Jack
Cash, William


Baker, Rt Hon K. (Mole Valley)
Chalker, Rt Hon Mrs Lynda


Baker, Nicholas (Dorset N)
Chapman, Sydney


Baldry, Tony
Clark, Dr Michael (Rochford)


Batiste, Spencer
Clark, Sir W. (Croydon S)


Bellingham, Henry
Clarke, Rt Hon K. (Rushcliffe)


Bendall, Vivian
Colvin, Michael


Bennett, Nicholas (Pembroke)
Conway, Derek


Benyon, W.
Coombs, Anthony (Wyre F'rest)


Bevan, David Gilroy
Coombs, Simon (Swindon)


Biffen, Rt Hon John
Cope, Rt Hon John


Blaker, Rt Hon Sir Peter
Couchman, James


Body, Sir Richard
Cran, James


Bonsor, Sir Nicholas
Currie, Mrs Edwina


Boscawen, Hon Robert
Curry, David


Boswell, Tim
Davies, Q. (Stamf'd &amp; Spald'g)


Bottomley, Peter
Davis, David (Boothferry)


Bottomley, Mrs Virginia
Day, Stephen


Bowden, Gerald (Dulwich)
Devlin, Tim


Boyson, Rt Hon Dr Sir Rhodes
Dicks, Terry


Brandon-Bravo, Martin
Dorrell, Stephen


Brazier, Julian
Douglas-Hamilton, Lord James


Bright, Graham
Dover, Den


Brooke, Rt Hon Peter
Dunn, Bob


Brown, Michael (Brigg &amp; Cl't's)
Dykes, Hugh


Bruce, Ian (Dorset South)
Evans, David (Welwyn Hatf'd)






Evennett, David
Latham, Michael


Fallon, Michael
Lawrence, Ivan


Favell, Tony
Lee, John (Pendle)


Fenner, Dame Peggy
Leigh, Edward (Gainsbor'gh)


Field, Barry (Isle of Wight)
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lester, Jim (Broxtowe)


Fishburn, John Dudley
Lightbown, David


Forman, Nigel
Lilley, Peter


Forsyth, Michael (Stirling)
Lloyd, Sir Ian (Havant)


Forth, Eric
Lloyd, Peter (Fareham)


Fowler, Rt Hon Norman
Lord, Michael


Fox, Sir Marcus
Luce, Rt Hon Richard


Franks, Cecil
Lyell, Sir Nicholas


Freeman, Roger
McCrindle, Robert


French, Douglas
MacKay, Andrew (E Berkshire)


Fry, Peter
Maclean, David


Gale, Roger
McLoughlin, Patrick


Gill, Christopher
McNair-Wilson, Sir Michael


Gilmour, Rt Hon Sir Ian
McNair-Wilson, P. (New Forest)


Glyn, Dr Alan
Madel, David


Goodlad, Alastair
Malins, Humfrey


Goodson-Wickes, Dr Charles
Mans, Keith


Gorman, Mrs Teresa
Maples, John


Gorst, John
Marland, Paul


Gow, Ian
Marlow, Tony


Grant, Sir Anthony (CambsSW)
Marshall, John (Hendon S)


Greenway, Harry (Ealing N)
Marshall, Michael (Arundel)


Greenway, John (Ryedale)
Martin, David (Portsmouth S)


Gregory, Conal
Mawhinney, Dr Brian


Griffiths, Peter (Portsmouth N)
Maxwell-Hyslop, Robin


Grist, Ian
Meyer, Sir Anthony


Ground, Patrick
Miller, Sir Hal


Grylls, Michael
Miscampbell, Norman


Hague, William
Mitchell, Andrew (Gedling)


Hamilton, Hon Archie (Epsom)
Mitchell, Sir David


Hamilton, Neil (Tatton)
Moate, Roger


Hampson, Dr Keith
Monro, Sir Hector


Hanley, Jeremy
Montgomery, Sir Fergus


Hannam, John
Moore, Rt Hon John


Hargreaves, A. (B'ham H'll Gr')
Morrison, Rt Hon P (Chester)


Hargreaves, Ken (Hyndburn)
Moss, Malcolm


Harris, David
Moynihan, Hon Colin


Haselhurst, Alan
Mudd, David


Hawkins, Christopher
Neale, Gerrard


Hayward, Robert
Nelson, Anthony


Heathcoat-Amory, David
Nicholls, Patrick


Heddle, John
Nicholson, David (Taunton)


Hicks, Mrs Maureen (Wolv' NE)
Nicholson, Emma (Devon West)


Hicks, Robert (Cornwall SE)
Norris, Steve


Higgins, Rt Hon Terence L.
Onslow, Rt Hon Cranley


Hill, James
Oppenheim, Phillip


Hind, Kenneth
Page, Richard


Hogg, Hon Douglas (Gr'th'm)
Paice, James


Holt, Richard
Patnick, Irvine


Hordern, Sir Peter
Patten, Chris (Bath)


Howard, Michael
Pattie, Rt Hon Sir Geoffrey


Howarth, Alan (Strat'd-on-A)
Pawsey, James


Howarth, G. (Cannock &amp; B'wd)
Porter, Barry (Wirral S)


Howell, Ralph (North Nortolk)
Porter, David (Waveney)


Hughes, Robert G. (Harrow W)
Portillo, Michael


Hunt, David (Wirral W)
Powell, William (Corby)


Hunter, Andrew
Price, Sir David


Hurd, Rt Hon Douglas
Raffan, Keith


Irvine, Michael
Raison, Rt Hon Timothy


Jack, Michael
Rathbone, Tim


Jackson, Robert
Redwood, John


Janman, Tim
Rhodes James, Robert


Johnson Smith, Sir Geoffrey
Riddick, Graham


Jones, Robert B (Herts W)
Ridsdale, Sir Julian


Kellett-Bowman, Dame Elaine
Roberts, Wyn (Conwy)


Key, Robert
Roe, Mrs Marion


King, Roger (B'ham N'thfield)
Rossi, Sir Hugh


Kirkhope, Timothy
Rost, Peter


Knapman, Roger
Rowe, Andrew


Knight, Greg (Derby North)
Rumbold, Mrs Angela


Knight, Dame Jill (Edgbaston)
Ryder, Richard


Knowles, Michael
Sackville, Hon Tom


Knox, David
Sainsbury, Hon Tim


Lamont, Rt Hon Norman
Scott, Nicholas


Lang, Ian
Shaw, David (Dover)





Shaw, Sir Giles (Pudsey)
Townend, John (Bridlington)


Shaw, Sir Michael (Scarb')
Townsend, Cyril D. (B'heath)


Shelton, Sir William
Tracey, Richard


Shephard, Mrs G. (Norfolk SW)
Tredinnick, David


Shepherd, Richard (Aldridge)
Trippier, David


Shersby, Michael
Trotter, Neville


Sims, Roger
Twinn, Dr Ian


Skeet, Sir Trevor
Viggers, Peter


Smith, Sir Dudley (Warwick)
Waddington, Rt Hon David


Smith, Tim (Beaconsfield)
Wakeham, Rt Hon John


Soames, Hon Nicholas
Waldegrave, Hon William


Speed, Keith
Walden, George


Speller, Tony
Walker, Bill (T'side North)


Spicer, Sir Jim (Dorset W)
Waller, Gary


Spicer, Michael (S Worcs)
Walters, Sir Dennis


Squire, Robin
Ward, John


Stanbrook, Ivor
Wardle, Charles (Bexhill)


Stanley, Rt Hon Sir John
Warren, Kenneth


Steen, Anthony
Watts, John


Stern, Michael
Wheeler, John


Stevens, Lewis
Whitney, Ray


Stewart, Allan (Eastwood)
Widdecombe, Ann


Stewart, Andy (Sherwood)
Wiggin, Jerry


Stewart, Rt Hon Ian (Herts N)
Wilshire, David


Stradling Thomas, Sir John
Wolfson, Mark


Sumberg, David
Wood, Timothy


Summerson, Hugo
Woodcock, Mike


Tapsell, Sir Peter
Yeo, Tim


Taylor, John M (Solihull)
Young, Sir George (Acton)


Thompson, D. (Calder Valley)



Thompson, Patrick (Norwich N)
Tellers for the Noes:


Thornton, Malcolm
Mr. Tristan Garel-Jones and


Thurnham, Peter
Mr. Tony Durant.

Question accordingly negatived.

Clause 4

LIABILITY OF PARENTS TO MAINTAIN CHILDREN UNDER THE AGE OF NINETEEN IN RESPECT OF WHOM INCOME SUPPORT IS PAID

Mr. Scott: I beg to move amendment No. 22, in page 3, line 22, leave out subsection (3).

Madam Deputy Speaker: With this it will be convenient to discuss Government amendment No. 23.

Mr. Scott: The amendments are purely technical. They amend clause 4 to take account of the recent commencement order which brought into effect from 1 April 1989 sections of the Family Law Reform Act 1987 which amend section 26(4) of the Social Security Act.
As originally drafted, clause 4 provides for amendments of section 26(4) before and after its amendment by the Family Law Reform Act. This is no longer necessary and the clause is therefore simplified by the two amendments.

Amendment agreed to.

Amendment made: No. 23, in page 3, line 30, leave out `as substituted by' and insert
reference to a person's children to be construed in accordance with".—[Mr. Scott.]
Further consideration of the Bill adjourned.—[Mr. Fallon.]

Bill, as amended (in the Standing Committee), to he further considered tomorrow.

NORTHERN IRELAND

Resolved,
That the draft Food (Northern Ireland) Order 1989, which was laid before this House on 16th January, be approved. —[Mr. Ian Stewart.]

STATUTORY INSTRUMENTS, &c.

Queen's Recommendation having been signified—

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.), and the order [7 April].

DATA PROTECTION

That there be paid to or in respect of the Data Protection Registrar such pension as is provided for in the Pension Arrangement attached to the Home Office letter of 1st March 1989 to Mr. Howe, a copy of which was laid before this House on 15th March. —[Mr. Fallon.]

Question agreed to.

Tenant Farmers

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fallon.]

Mr. Richard Alexander: I am grateful for the opportunity to initiate an Adjournment debate that concerns tenant farmers. From inquiries that I have made and briefings that I have received, I know that the concerns of tenant farmers are shared by the National Farmers Union, the Tenant Farmers Association and the Country Landowners Association. These organisations have come together, especially over recent months. It is a sign of the concerns of all the organisations that represent tenant farmers that they are co-operating with one another on such a vital matter. For example, the Country Landowners Association is surveying some landowners to try to ascertain what, if anything, would bring new tenancies on to the market.
The tenanted sector represents 35 to 40 per cent. of all activity in agriculture. It is estimated that it represents one half of dairy production. It is, therefore, a significant part of the agriculture scene. That being so, it is important that, as far as possible, we as a nation ensure a fair working environment for the tenant farmer.
Additionally, the tenanted sector has offered a means of entry into the industry for those without considerable means. The landlord tends to be a business investor, and often a long-term one. We need both the tenant farmer and the landlord, yet the tenant has constraints on his activities which the freeholder does not face. The tenant has to work within the legal structure of the Agricultural Holdings Act 1986. His balance sheet cannot show a capital asset in the same way as a freeholder's. His income is greatly reduced by the rent that he has to pay.
If things go really bad, the freeholder can sell up and pay his liabilities. The tenant cannot do that. He has no collateral apart from his machinery, which is often not very much and which is usually depreciating. In addition, he has his livestock. The tenant cannot sell and restructure his operation.
If the tenant is not too highly geared, he may be in a better position than the owner-occupier, who may have recently taken on his farm with very high capital and interest repayment obligations. I would suggest to my hon. Friend the Parliamentary Secretary that not many tenant farmers are in that happy position. Most of them are highly geared, and their lack of collateral causes bank managers to monitor them carefully and constantly with a view to pulling in their loans. Therefore, in matters of finance the tenant has much less flexibility than the freeholder.
The Tenant Farmers Association has produced figures to suggest that the 1988 statistics show that the value of the tenant sector per acre has fallen from £590 in 1978–79 to £322 in 1987–88. They show, for example, that the farmer who is growing winter wheat that is sold for feed has a surplus of only £40 per acre. From that, he pays his rent, his tax and his personal drawings. With so may arable farmers paying more than £40 per acre in rent, the tenant farmers' base is weakening. His reliance on short-term bank borrowing, with an increase in financial charges, is increasing.
The Agricultural Holdings Act provides a framework that imposes obligations on tenant farmers' husbandry. If


a tenant looks after his farm he can generally be assured of lifetime security and even more than that if his tenancy was created before 1984, as close members of his family can succeed to the tenancy.
Tenant farmers believe that the present framework of law has served them well in the past, during a period of expanding production. However, in times of restraint and diversification, they face additional problems. Most tenancy agreements allow the landlord power to serve notice to quit on two or three months' notice if the landlord gets planning permission. In addition, a county council farm tenant may be prevented from taking on more land or from having another source of income.
Government schemes such as set-aside and the concept of environmentally sensitive areas were introduced to reduce overall agricultural output and attain certain environmental objectives, but in practice they are not available to all classes of farmers. Many diversification schemes involve proposals that fall outside the legal definition of agriculture, which means that they are subject to landlords' consent. There are many supportive landlords. but in some cases landlords have refused consent to otherwise reasonable propositions that would not have affected their long-term interests. The tenant has no power to challenge such a refusal. Some tenants feel too vulnerable even to consider such a scheme, and some landlords' agents have been known to send threatening letters when a tenant has gone only as far as registering his eligibility for set-aside.
I appreciate that a wise tenant will want to consult his landlord at an early stage and should first obtain a business study, for which a grant can be obtained under the farm diversification grant scheme. It is sensible and natural that a landlord should want to see a viable proposition that has been well thought out.
The Tenant Farmers Association has suggested that a tenant should have a right of appeal to the agricultural lands tribunal if the landlord does not agree to his diversification plans. As a lawyer, I appreciate that the difficulty is that the tribunal has no power to amend a tenancy agreement. If the tenancy agreement specifically prohibits non-agricultural activity, it would require quite fundamental change to the Agricultural Holdings Act if this route were to be followed, and it would be highly contentious.
In some ways, diversification can be a disaster for the tenant, for when planning permission is needed for a non-agricultural use the grant of such permission is a ground for an incontestable notice to quit. Most incontestable grounds in a notice to quit rely on something that the tenant has done wrongly or badly, but that is not so when planning permission has been granted, even if it were granted on an application by the tenant. Usually, planning permission and the notice to quit relate to the whole farm, and the notice must be between one and two years. I learn that many tenants are being offered agreements that allow landlords to serve a notice to quit on part of the farm only, which allows much shorter notice—usually two or three months only. This is another aspect of the vulnerability of the tenant that I draw to the House's attention. As the farmhouse is often the attraction for development, the tenant may be left with the prospect of losing some or all of his farm buildings, including his farmhouse.
That brings me to the problem that a tenant faces with compensation. When he loses his holding, the tenant is

entitled to the equivalent of five or six times the rent of the lost area, but where that area includes a farm or buildings, it is not adequate compensation for the destruction of one's life's work.
The Tenant Farmers Association is calling for compensation for loss of potential profits and the cost of replacement of fixed equipment, among other things, to be awarded to the tenant, by arbitration if necessary. The claim seems to be fair and equitable, and I suggest it to my hon. Friend the Minister. Even though it is an abuse of the notice to quit powers under the 1986 Act, there is nothing to stop a landlord obtaining planning permission without ever intending to implement it or actually implementing it, just to gain possession of the property. I suggest that if planning permission is to be used just as a device to end a tenancy, surely the tenant should in turn be awarded proper compensation for his loss.
Had my time to speak not been limited, I would have addressed the House at greater length on the problems arising out of the dairy quotas. I should like to stress to my hon. Friend the Parliamentary Secretary the difficulties with regard to arbitration. Usually new rents are negotiated between landlord and tenant, both sides using agents, and if an agreement cannot be reached, the 1986 Act lays down factors that an arbitrator should take into account.
The hazards of arbitration are now only too apparent. In a recent case in Lancashire five tenant farmers had to carry the landlord's entire cost of arbitration of £75,000 on some 700 acres. It was an astonishing award by any standards. The fact that it happened means that arbitration is not now to be considered lightly, even by some larger farmers. Many agents are reporting that tenants are instructing them to act in negotiations, but not to go to arbitration, with the result that higher rents than can be justified economically are often agreed to avoid this. At a time in the economy of agriculture when it would be an effective argument for a tenant to press for a reduction in the new rent claimed, arbitration is of itself generating unjustified rent increases.
The remedy is clear: each side should bear his own costs of an arbitration, unless an arbitrator makes a specific finding that one side or the other was unreasonably pursuing his case to arbitration. Arbitration should be simple and cheap and should be an acceptable outcome and procedure. Without that reform, it is rapidly ceasing to be any of those things. I believe that the problem is even worse in some cases for the county council tenant, where the approach is often confrontational rather than conciliatory, with arbitration almost the inevitable outcome. Once again, the smaller farmer is the one to suffer.
The tenant farmer has historically been of the greatest importance to agriculture. When farming faces declining incomes, the tenanted sector faces particular disadvantages and difficulties, especially as agriculture moves from a period of growth to one of restraint and diversification. I hope that in his reply my hon. Friend the Parliamentary Secretary will recognise the importance of the sector and its difficulties, that he will reaffirm his belief in a healthy tenanted sector and that he will pledge the Government to take action from time to time when difficulties such as those I have outlined are brought to his notice. Only in that way will the tenanted sector continue to be a healthy one in the agricultural scene.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Richard Ryder): I congratulate my hon. Friend the Member for Newark (Mr. Alexander), who is a distinguished member of the Select Committee on Agriculture, on his success in the ballot. I do, of course, appreciate the concern about the future of the agricultural landlord-tenant system. It is an important issue and I am grateful to him for raising it.
As I see it, there are two interrelated issues which need to be considered. First, there is the continuing decline in the tenanted sector which affects potential new tenants and established tenants who, for one reason or another, need additional land. Secondly, there are the difficulties that some existing farmers face.
As my hon. Friend knows, at the end of the last century about 90 per cent. of the agricultural land was tenanted, but, according to the 1987 June census, the figure is now about 37 per cent. There have been a number of contributory factors, but an increase in the size of the owner-occupied sector was probably inevitable. It echoes the pattern in the residential sector. However, it is clear that some landowners who do not want to farm the land themselves have been disinclined to let and have opted for other forms of contractual arrangements to maintain value and income. If the tenanted sector is to be revitalised, we must find ways of making the letting of land more attractive to landowners. I shall return to this issue a little later. First, I shall refer to those farmers who already rent a holding.
In recent years, the movement in average farm incomes showed a similar pattern for all types of tenure with declines in 1985–86 followed by a recovery in 1986–87. However, in 1987–88, the latest year for which data are available, wholly tenanted farms in the farm business survey in England recorded a small increase—nearly 5 per cent.—in average income, while their owner-occupied and mixed tenure counterparts showed falls. Incomes on particular types of farm—for example, dairying—moved in the same direction for tenanted as for other farms. Figures are not yet available for 1988–89, the year in which the sharp fall in farm incomes has been the subject of concern in the farming community.
Assets tend to be lower on tenanted than on owner-occupied farms, but borrowings are also lower. On average, the borrowings of tenanted farms in 1987–88 were only about two thirds of those of owner-occupied farms and less than half those of mixed tenure farms. In addition, about 40 per cent. of tenanted farms in the survey recorded no bank borrowing at all at the close of 1987–88. For the small business size group, about half recorded no bank borrowings.
As I have said, our 1987–88 survey showed that tenanted farms in England recorded an increase in average income of nearly 5 per cent. The annual rent inquiry for 1988 showed that in all English farms in the inquiry due a rent review between 1987 and 1988 there was an average increase in rent of 3·5 per cent. On about half the farms due a rent review there was no change in the rent. In Wales on farms due a rent review there was an average increase of 7·75 per cent. On about one quarter of the farms due a rent review there was no change.
There is, therefore, no evidence to suggest that rents are not coming down as quickly as profits. On the contrary, it appears that the new rent formula introduced in 1984 is working satisfactorily.
My hon. Friend has drawn attention to some recent arbitrations in which tenants have been faced with high costs. Under the Agricultural Holdings Act 1986, the arbitrator determines who should pay the costs. He must take into consideration, first, the reasonableness or otherwise of the claim of either party; secondly, any unreasonable demand for particulars or refusal to supply particulars; and, thirdly, generally all the circumstances of the case.
The usual advice to arbitrators in legal text books, as my hon. Friend, as a lawyer, will know, is that they should follow the general working principle adopted by the courts that costs should follow the award unless the particular circumstances dictate otherwise. Therefore, each party must remember that the award may go against him, in which case he is likely to have to pay the costs. He should consider carefully with his professional adviser whether it is sensible to go to arbitration or whether it would be more prudent to reach an agreement.
Arbitration costs can, of course, be reduced if parties reach agreement on as many issues as possible before the hearing. If complex legal issues are raised or parties produce a mass of evidence, an arbitration can prove expensive.
The Royal Institute of Chartered Surveyors has published a booklet entitled "Minimising the Costs of Agricultural Arbitration". It is a step-by-step guide through the arbitration process, showing the correct procedures and how to avoid protracted proceedings and expensive consequences. We hope that parties to an arbitration will find it a useful guide.
I note my hon. Friend's suggestion that each party should bear his own costs, unless the arbitrator considers one side to have acted unreasonably, in which case he could be required to pay the other party's costs. The Tenant Farmers Association may wish to discuss that proposal with the Royal Institution of Chartered Surveyors and other organisations representing landlords and tenants. If it is felt that this approach is practical and it attracts a reasonable degree of support from the industry, we would be prepared to consider proposals for changing the legislation when an opportunity arises. We would, however, need to be satisfied that there is a genuine need for change which could not be met in some other way.
It is suggested that tenants may be unable to diversify into non-agricultural activities or to take up the opportunity of alternative land uses, but I am pleased to say that there are signs that landlords are allowing their tenants to do so. A tenant who wants to establish an enterprise must consider the terms of his tenancy agreement, and he may need to negotiate a variation with his landlord. For that reason, he will be wise to discuss his ideas with the landlord. A business study, for which a grant can be obtained under a farm diversification grant scheme, may prove invaluable in this context, as I would expect a landlord to be reluctant to give approval to a scheme of doubtful viability or which is ill conceived.
I understand that some tenancy agreements—particularly those of local authority tenants—prohibit the tenant from earning income from non-agricultural


sources. However, I believe that some local authorities are now being more flexible in their approach to diversification, and I find that encouraging.
More generally, I make it clear that, when we are devising new schemes, we take considerable trouble to ensure that tenants and owner-occupiers alike can participate. I am pleased to say that this is bearing fruit. For example, in the set-aside scheme nearly one third of all applications came from tenants.
My hon. Friend intimated that a tenant should be able to apply to the agricultural lands tribunal if his landlord will not agree to his diversification plans. However, in many cases an amendment to the tenancy agreement is required, and, at present, ALTs do not have the power to do that. Without fairly fundamental changes to the Agricultural Holdings Act 1986, it is doubtful whether a tribunal could give a tenant permission to engage in a non-agricultural activity if a clause in the tenancy agreement specifically prohibits the use of the land for non-agricultural purposes.
The agricultural holdings legislation aims to strike a fair balance between the often conflicting interests of landlords and tenants. The satisfactory tenant farmer is given security of tenure, but the legislation recognises that there are circumstances in which the landlord should he able to regain possession. They include the situation in which he has obtained planning permission to use the tenanted land for a non-agricultural purpose. It should be remembered that the landlord is the owner of the capital asset and should, in common with other owners of property, be entitled to any increase in value that may accrue from possible development. He has elected to enter the land market with all the risks that that involves, which, in some cases, can mean a low return and falling land values, where there is no development potential, or the land is of poor quality.
My hon. Friend said that some landlords are using the incontestable notice to quit provisions as a means of regaining vacant possession of the holdings and are not proceeding with the development for which they had obtained planning permission. I have not received any representations on this issue, and if my hon. Friend wishes me to examine this issue I would need to have further information on the scale of the problem.
The appropriate level of compensation to be paid to a tenant when his land is taken for development is clearly a contentious issue. No formula will satisfy everyone, but the current provisions in the legislation entitle the tenant to compensation for disturbance equal to up to six years' rent, plus compensation for improvements and tenant

right matters. The level of compensation for disturbance was last increased in 1968 at a time when loss of land to development was increasing. The rate of land lost to development—and this is not generally known—is now only about one third of what it was in the 1960s. A major difficulty noted in 1968, which is as valid today, is the shortage of land to rent. This often makes it difficult for tenant farmers who lose land to development to find other land to rent. Increasing the level of compensation paid to tenants for disturbance could be a further disincentive to landlords to let land.
That brings me back to a point that I made at the outset of my speech concerning the decline in the amount of tenanted land. Various interests in the industry are rightly considering ways of revitalising the tenanted sector. These include provision of fixed-term tenancies, retirement tenancies and complete freedom of contract. I welcome these initiatives and look forward to hearing the views of the Tenant Farmers Association on the way forward when I meet its representatives in the middle of May.
My right hon. Friend the Minister and I have made it clear that if the Government were presented with practical ways of making tenancies easier to create, we would be prepared to consider them. However, if we are to contemplate legislation—and I should stress that there are always difficulties in securing a slot in the legislative programme—there must be not only some signs of agreement in the industry but, even more important, a clear prospect of the legislation being of worthwhile practical effect.
Finally, my hon. Friend mentioned the attachment of milk quotas to land. The Government's position is clear. It would be in the industry's interest for the link between quotas and land to be broken. That would make it easier for normal structural development to take place. That requires changes in Community rules, so immediate action is in any event unlikely. The Government would certainly wish to protect the legitimate interest of landlords and tenants alike.
I thank my hon. Friend for initiating the debate and for setting out his case so clearly and cogently. If, for reasons of time, I have not been able to deal with each of his points, he can be sure that I will write to him later. This is an issue of great importance, as he stressed, and my hon. Friend has done a great service to the House and to tenant farmers by raising the subject so well.
Question put and agreed to.
Adjourned accordingly at seven minutes to Twelve o'clock.